Using the industry peer median P/E multiple (trailing + forward), Johnson & Johnson (JNJ) has a fair value of $198.60 based on 7 comparable companies in the Drug Manufacturers - General industry.
USD in millions except Fair Price. Subject company highlighted.
| Mkt Cap ($M) | Trailing P/E | Forward P/E | |
|---|---|---|---|
| Johnson & JohnsonJNJ | 584,902 | 21.8x | 20.8x |
| AbbVie Inc.ABBV | 373,437 | 89.5x | 14.5x |
| Merck & Co., Inc.MRK | 294,783 | 16.4x | 23.3x |
| UnitedHealth Group IncorporatedUNH | 243,334 | 20.3x | 15.0x |
| Amgen Inc.AMGN | 190,369 | 24.8x | 15.8x |
| Gilead Sciences, Inc.GILD | 170,903 | 20.3x | 15.9x |
| Novo Nordisk A/SNVO | 161,919 | 10.9x | 12.1x |
| Pfizer Inc.PFE | 156,770 | 20.3x | 9.3x |
| Industry Median | 20.3x | 15.0x | |
| (*) Profit after tax | 26,804 | 28,077 | |
| Equity Value | 543,372 | 421,567 | |
| (/) Outstanding shares | 2,429 | 2,429 | |
| Fair Price | $224 | $174 | |
This P/E relative valuation uses the industry peer median Price-to-Earnings ratio to estimate fair value. Both trailing (last 12 months) and forward (next fiscal year analyst estimates) P/E multiples are computed independently.
The industry median trailing P/E is applied to the company's TTM net income, and the forward P/E to analyst-estimated net income. Each produces an equity value divided by shares outstanding to yield a fair price per share. The selected fair value is the average of the trailing and forward legs.