Using the PEG framework with analyst consensus forward EPS growth of 10.8% plus 2.1% dividend yield, Johnson & Johnson has a fair value of $124.81 based on NTM EPS (FY2026) of $11.56. The current PEG ratio is 1.93.
PEG < 1 = bargain, 1–1.5 = fair, > 2 = expensive.
PEG works well for steady growers with predictable earnings.
| EPS Growth RateForward | 8.7% |
| Dividend Yield | +2.1% |
| Adjusted Growth (clamped 8–25%) | 10.8% |
| Fair P/E | 10.8x |
| NTM EPS (FY2026) | $11.56 |
| Fair Value | $124.81 |
| Period | EPS Est. | Growth | Analysts |
|---|---|---|---|
| FY2025 (actual) | $11.03 | — | — |
| FY2026E | $11.56 | +4.8% | 17 |
| FY2027E | $12.56 | +8.7% | 18 |
| FY2028E | $13.73 | +9.3% | 15 |
| FY2029E | $15.06 | +9.6% | 8 |
| FY2030E | $16.71 | +11.0% | 7 |
5Y Forward EPS CAGR: 8.7%
| Year | Net Income | EPS | YoY |
|---|---|---|---|
| FY2021 | $20.9B | $7.81 | — |
| FY2022 | $17.9B | $6.73 | -13.8% |
| FY2023 | $35.2B | $13.72 | +103.9% |
| FY2024 | $14.1B | $5.79 | -57.8% |
| FY2025 | $26.8B | $11.03 | +90.5% |
4Y Historical EPS CAGR: 9.0%
The PEG Fair Value uses the Price/Earnings-to-Growth framework. A stock is fairly valued when its P/E ratio equals its earnings growth rate (PEG = 1.0). This model adds dividend yield to the growth rate per the original PEGY formula.
Growth rate priority: analyst consensus forward EPS CAGR (when ≥ 3 analysts cover the stock), falling back to historical EPS CAGR. Using EPS rather than net income avoids distortion from share buybacks. The growth rate is clamped between 8% and 25% — below 8% would undervalue stable earners, while above 25% would overvalue unsustainable spikes.