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General information
Johnson & Johnson manufactures health care products and provides related services for the consumer, pharmaceutical, and medical devices and diagnostics markets. The Company sells products such as skin and hair care products, acetaminophen products, pharmaceuticals, diagnostic equipment, and surgical equipment in countries located around the world.
  • Bad financial results growth rate -1.0% (average between last period year over year growth for revenue and EBITDA), there is slowdown compared to average historical growth rates (2.2%)
  • Dividend yield for the last twelve months 2.9%
  • Free cash flow yield 2.9% (LTM)
  • Share price is 22.7% higher than minimum and 11.0% lower than maximum for the last 3 years
  • The company is undervalued by EV / LTM EBITDA multiple compared to target level (13.9x vs 14.3x)
  • Fundamental value created in LTM (estimate) -0.6%
Key Financials
Ticker: JNJ
Share price, USD: 138.36
Common stocks: 2 631 872 399
Dividend Yield:  2.9%
FCF Yield LTM: 2.9%
EV / LTM EBITDA: 13.9x
Last revenue growth (y/y):  1.7%
Last growth of EBITDA (y/y):  -3.8%
Historical revenue growth:  3.0%
Historical growth of EBITDA:  1.3%
Target EV / EBITDA (hist 75% percentile): 14.3x
Fundamental value created in LTM: -0.6%
EV / LTM EBITDA mutiple calculation
Market Cap ($m): 364 146
Net Debt ($m): 11 259
EV (Enterprise Value): 375 405
EBITDA LTM ($m): 27 056
EV / LTM EBITDA: 13.9x

Revenue and EBITDA

Quarterly values ($m)

Change (y/y)

Cash Flow

Free Cash Flow ($m)

Net Debt / Cash and Equivalents ($m)

Share price and dividends

Share price

Payment USD per share

Multiple and potential

EV / LTM EBITDA and 75% percentile

Potential dynamics

Value Creation

Fundamental Value Creation is calculated as ratio of value created in the last period to current market cap of the company.

The fundamental value can be created in two ways:
• cash generation in form of dividend payments or debt reduction or share buybacks
• growth of the company enterprise value through improving financial results

The growth of enterprise value in the last period is estimated as product of:
• annualized increase of EBITDA in the last reporting period year over year
• relevant EV/EBITDA multiple (average between actual EV/EBITDA for the company and average general level of 10.0x is applied)

Parameter
#
Formula
Value
    
    
            EBITDA (pre LTM Q)
(1)
7 719
            EBITDA (last Q)
(2)
7 427
            EBITDA LTM
(3)
27 056
    
    
        EBITDA LTM / last Q
(4)
(3) / (2)
3.643
    Gain of EBITDA (mln $)
(5)
( (2)-(1) ) * (4)
-1 064
    
    
            EV
(6)
375 405
        Mult
(7)
(6) / (3)
13.9x
        Mult common
(8)
const
10.0x
    Mult avg
(9)
avgerage
11.9x
    
    
    Equity+
(10)
(5) * (9)
-12 698
    FCF LTM
(11)
10 431
    
    
Value+
(12)
(10) + (11)
-2 267
Cap
(13)
364 146
    
    
Fundamental value creation
(14)
(12) / (13)
-0.6%

Potential

EBITDA LTM       27 056
 
EBITDA E       26 981
Mult aim       14.3x
 
EV E       387 029
NetDebt corr       10 430
 
Cap E       376 599
Cap       364 146
Growth potential            3.4%