NYSE · Healthcare

Johnson & Johnson

JNJ · Drug Manufacturers - General

$228.39

▼ -5.81 (-2.48%)

Cached · 10 min

Overall Grade

Defensive

Enterprising

Profitability

A⤢

Gross Profit Margin 66.3%

Operating Margin 26.6%

Net Income Margin 21.8%

Fin. Health

D⤢

Years to Pay Off Debt 10.5 yrs

Working Capital vs Long-Term Debt -$36.1B

Working Capital $1.5B

Valuation

F⤢

Margin of Safety 0.0%

Price-to-Book 6.77x

Cash Flow

A⤢

Free Cash Flow $1.5B

CapEx % of Net Income 20.0%

Owner Earnings $8.3B

Profitability

Gross Profit Margin 66.3%

Revenue minus cost of goods sold. Graham's ≥40% threshold identifies businesses with durable pricing power. Note: software and financial companies naturally exceed this; retailers and manufacturers rarely reach it due to their cost structures.

Operating Margin 26.6%

Profit after operating costs before interest and taxes. A consistent ≥15% operating margin signals a business with real competitive advantages. Capital-intensive industries (airlines, auto, commodities) rarely hit this threshold due to their structural cost base — compare within industry for context.

Net Income Margin 21.8%

Bottom-line profit as a percentage of revenue. The ≥20% target reflects Buffett's preference for highly profitable businesses. Financial engineering (buybacks, tax optimisation) can inflate this temporarily — look for consistency across multiple years rather than a single strong result.

Financial Health

Years to Pay Off Debt 10.5 yrs

Total Debt ÷ Net Income. Lower = stronger balance sheet. Important caveat: utilities, telecoms, REITs, and infrastructure companies carry large structural debt by design — their bond-like cash flows service it comfortably at ratios that would alarm Graham. Compare within sector.

Working Capital vs Long-Term Debt -$36.1B

Working Capital minus Long-Term Debt. Negative results are common and expected in capital-return-focused businesses like Apple, Domino's, and McDonald's — where aggressive buybacks and dividends intentionally reduce book equity. This does not indicate financial distress in high-FCF businesses.

Working Capital $1.5B

Current Assets minus Current Liabilities. Negative working capital can be a deliberate efficiency strategy in businesses that collect cash before paying suppliers (retailers, fast food franchises, subscription businesses). Assess alongside free cash flow generation for full context.

Cash Flow

Free Cash Flow $1.5B

Operating cash flow minus capital expenditures. Buffett's most important metric — cash a business actually generates for its owners after maintaining and growing its asset base. Consistently positive FCF is one of the strongest indicators of a durable, well-run business regardless of accounting profits.

CapEx % of Net Income 20.0%

Capital expenditure as a share of net income. Low CapEx signals a capital-light business that doesn't need heavy reinvestment to sustain earnings — Buffett's ideal. High CapEx is structurally necessary in manufacturing, airlines, telecoms, and semiconductors. For these industries, a high reading reflects the business model, not poor management.

Owner Earnings $8.3B

Net Income + Depreciation & Amortisation − Capital Expenditures. Buffett's preferred measure of a company's true annual earning power — what could theoretically be distributed to owners without impairing the business. More reliable than reported EPS because it accounts for the capital cost of maintaining the business.

Defensive — Graham's strict criteria (P/B, P/E, dividends, stability) · Enterprising — Profitability & cash flow focused, accepts higher valuations for quality

About Johnson & Johnson

Johnson & Johnson, together with its subsidiaries, engages in the research and development, manufacture, and sale of a range of products in the healthcare field worldwide. It operates in two segments, Innovative Medicine and MedTech. The Innovative Medicine segment offers products for various therapeutic areas, such as oncology, immunology, neuroscience, pulmonary hypertension, infectious diseases, and cardiovascular and metabolism distributed through retailers, wholesalers, distributors, hospitals, and healthcare professionals for prescription use. The MedTech segment provides a portfolio of products used in the surgery, orthopedic, cardiovascular, and vision fields distributed through wholesalers, hospitals and retailers, and used in the professional fields by physicians, nurses, hospitals, eye care professionals and clinics. This segment also offers products and enabling technologies that support joint reconstruction, trauma, spine, sports related injuries, and others, as well as open, laparoscopic, and robotic surgical procedures; instrumentation, energy devices, stapling systems, wound closure, biosurgery products, and digital and robotic technologies; breast aesthetics and reconstruction; contact lenses under the ACUVUE brand; intraocular lenses for cataract surgery, and other products used in cataract and refractive procedures under the TECNIS brand. The company was founded in 1886 and is based in New Brunswick, New Jersey.

Market Data

Market Cap $549.8B

Enterprise Value $599.1B

P/E (TTM) 26.46

Dividend Yield 2.22%

Exchange NYSE

Key Margins

Gross Profit 66.3%

Operating Margin 26.6%

Net Margin 21.8%

Company Info

Sector Healthcare

Industry Drug Manufacturers - General

Employees 138200

Country United States

Visit website

📖

Full Graham Analysis

Mr. Market is currently offering Johnson & Johnson at $228.39.

The business passes only 2 of 7 of Graham's defensive criteria — well below his required standard.

At $228.39, the stock trades at a 467% premium to its Graham Number of $40.30. Graham would consider this price speculative.

There is no margin of safety at the current price. Graham would advise patience and waiting for a better entry point.

Negative NCAV — liabilities exceed current assets. Common in capital-return businesses (buybacks, debt-funded dividends) and capital-intensive industries. Not automatically a warning sign..

Conclusion: By Graham's standards, this stock is speculative at its current price. The intelligent investor would look elsewhere or wait.

Showing Key Metrics

Income Highlights

Metric	Q1 2026	Q4 2025	Q4 2024
Gross Profit %	66.3%▼	67.6%•	N/A
Operating Margin %	26.6%▲	22.8%•	N/A
Net Income %	21.8%▲	20.8%•	N/A
Diluted EPS	2.14▲	2.10•	N/A

Balance Sheet Highlights

Metric	Q1 2026	Q4 2025	Q4 2024
Total Assets	$200.9B	$199.2B	N/A
Total Debt	$55.0B▲	$47.9B•	N/A
Working Capital	$1.5B▼	$1.5B•	N/A
Years to Pay Debt	10.50	9.37	N/A

Cash Flow Highlights

Metric	Q1 2026	Q4 2025	Q4 2024
Free Cash Flow	$1.5B▼	$5.5B•	N/A
Owner Earnings	$8.3B	$9.0B	N/A
CapEx % of Net Income	20.0%	35.9%	N/A

Income Statement

	2026	2025	2024
Tax Effect Of Unusual Items	-58,988	-160,650
Tax Rate For Calcs	0	0
Normalized EBITDA	8,734,000	7,956,000
Total Unusual Items	-468,000	-765,000
Total Unusual Items Excluding Goodwill	-468,000	-765,000
Net Income From Continuing Operation Net Minority Interest	5,235,000	5,116,000
Reconciled Depreciation	2,004,000	2,011,000
Reconciled Cost Of Revenue	8,106,000	7,968,000
EBITDA	8,266,000	7,191,000
EBIT	6,262,000	5,180,000
Net Interest Income	-43,000	23,000
Interest Expense	272,000	214,000
Interest Income	229,000	237,000
Normalized Income	5,644,012	5,720,350
Net Income From Continuing And Discontinued Operation	5,235,000	5,116,000
Total Expenses	17,667,000	18,973,000
Diluted Average Shares	2,445,200	2,439,000
Basic Average Shares	2,408,700	2,407,939
Diluted EPS	0	0
Basic EPS	0	0
Diluted NI Availto Com Stockholders	5,235,000	5,116,000
Net Income Common Stockholders	5,235,000	5,116,000
Net Income	5,235,000	5,116,000
Net Income Including Noncontrolling Interests	5,235,000	5,116,000
Net Income Continuous Operations	5,235,000	5,116,000
Tax Provision	755,000	-150,000
Pretax Income	5,990,000	4,966,000
Other Income Expense	-362,000	-665,000
Other Non Operating Income Expenses	106,000	100,000
Special Income Charges	-468,000	-865,000
Other Special Charges	300,000	900,000	0
Write Off	36,000
Restructuring And Mergern Acquisition	132,000	-116,000
Gain On Sale Of Security		100,000	100,000
Net Non Operating Interest Income Expense	-43,000	23,000
Interest Expense Non Operating	272,000	214,000
Interest Income Non Operating	229,000	237,000
Operating Income	6,395,000	5,591,000
Operating Expense	9,561,000	11,005,000
Research And Development	3,527,000	4,252,000
Selling General And Administration	6,034,000	6,753,000
General And Administrative Expense			6,453,000
Other Gand A			6,453,000
Salaries And Wages			-200,000
Gross Profit	15,956,000	16,596,000
Cost Of Revenue	8,106,000	7,968,000
Total Revenue	24,062,000	24,564,000
Operating Revenue	24,062,000	24,564,000

Balance Sheet

	2026	2025	2024
Treasury Shares Number	713,258	711,904
Ordinary Shares Number	2,406,585	2,407,939
Share Issued	3,119,843	3,119,843
Net Debt	33,299,000	28,224,000
Total Debt	54,987,000	47,933,000
Tangible Book Value	-16,433,000	-17,631,000
Invested Capital	136,173,000	129,477,000
Working Capital	1,457,000	1,498,000
Net Tangible Assets	-16,433,000	-17,631,000
Common Stock Equity	81,186,000	81,544,000
Total Capitalization	118,713,000	120,982,000
Total Equity Gross Minority Interest	81,186,000	81,544,000
Stockholders Equity	81,186,000	81,544,000
Gains Losses Not Affecting Retained Earnings	-14,831,000	-14,930,000
Other Equity Adjustments	-14,831,000	-14,930,000
Treasury Stock	76,264,000	75,624,000
Additional Paid In Capital	169,161,000	168,978,000
Capital Stock	3,120,000	3,120,000
Common Stock	3,120,000	3,120,000
Total Liabilities Net Minority Interest	119,708,000	117,666,000
Total Non Current Liabilities Net Minority Interest	61,992,000	63,540,000
Other Non Current Liabilities	10,208,000	9,868,000
Employee Benefits	6,760,000	6,957,000
Tradeand Other Payables Non Current	486,000	486,000
Non Current Deferred Liabilities	7,011,000	6,791,000
Non Current Deferred Taxes Liabilities	7,011,000	6,791,000
Long Term Debt And Capital Lease Obligation	37,527,000	39,438,000
Long Term Debt	37,527,000	39,438,000
Current Liabilities	57,716,000	54,126,000
Current Debt And Capital Lease Obligation	17,460,000	8,495,000
Current Debt	17,460,000	8,495,000
Other Current Borrowings		8,495,000	5,983,000
Pensionand Other Post Retirement Benefit Plans Current	2,911,000	4,534,000
Payables And Accrued Expenses	37,345,000	41,097,000
Current Accrued Expenses	25,798,000	27,718,000
Payables	11,547,000	13,379,000
Total Tax Payable	1,087,000	1,388,000
Income Tax Payable	1,087,000	1,388,000
Accounts Payable	10,460,000	11,991,000
Total Assets	200,894,000	199,210,000
Total Non Current Assets	141,721,000	143,586,000
Other Non Current Assets	14,105,000	14,368,000
Non Current Deferred Assets	6,727,000	6,874,000
Non Current Deferred Taxes Assets	6,727,000	6,874,000
Goodwill And Other Intangible Assets	97,619,000	99,175,000
Other Intangible Assets	49,061,000	50,403,000
Goodwill	48,558,000	48,772,000
Net PPE	23,270,000	23,169,000
Accumulated Depreciation	-31,425,000	-31,195,000
Gross PPE	54,695,000	54,364,000
Construction In Progress		7,361,000	6,289,000
Machinery Furniture Equipment		32,873,000	29,444,000
Buildings And Improvements		13,429,000	12,317,000
Land And Improvements		701,000	718,000
Current Assets	59,173,000	55,624,000
Other Current Assets
Inventory	14,583,000	14,191,000
Finished Goods	7,938,000	7,833,000
Work In Process	4,033,000	3,828,000
Raw Materials	2,612,000	2,530,000
Receivables	22,539,000	21,331,000
Other Receivables	4,818,000	4,153,000	4,085,000
Accounts Receivable	17,721,000	17,178,000
Allowance For Doubtful Accounts Receivable	-174,000	-183,000
Gross Accounts Receivable	17,895,000	17,361,000
Cash Cash Equivalents And Short Term Investments	22,051,000	20,102,000
Other Short Term Investments	363,000	393,000
Cash And Cash Equivalents	21,688,000	19,709,000
Cash Equivalents	18,378,000	16,410,000
Cash Financial	3,310,000	3,299,000

Cash Flow

	2026	2025	2024
Free Cash Flow	1,465,000	5,472,000
Repurchase Of Capital Stock	-4,028,000	-1,924,000
Repayment Of Debt	-5,225,000	-1,808,000
Issuance Of Debt	12,439,000	3,913,000
Capital Expenditure	-1,049,000	-1,837,000
End Cash Position	21,688,000	19,709,000
Beginning Cash Position	19,709,000	18,231,000
Effect Of Exchange Rate Changes	-25,000	23,000
Changes In Cash	2,004,000	1,455,000
Financing Cash Flow	530,000	-1,369,000
Cash Flow From Continuing Financing Activities	530,000	-1,369,000
Net Other Financing Charges	-697,000	-6,000
Proceeds From Stock Option Exercised	1,172,000	1,587,000
Cash Dividends Paid	-3,131,000	-3,131,000
Common Stock Dividend Paid	-3,131,000	-3,131,000
Net Common Stock Issuance	-4,028,000	-1,924,000
Common Stock Payments	-4,028,000	-1,924,000
Net Issuance Payments Of Debt	7,214,000	2,105,000
Net Short Term Debt Issuance	9,216,000	2,107,000
Short Term Debt Payments	-3,223,000	-1,806,000
Short Term Debt Issuance	12,439,000	3,913,000
Net Long Term Debt Issuance	-2,002,000	-2,000
Long Term Debt Payments	-2,002,000	-2,000
Long Term Debt Issuance	0	0
Investing Cash Flow	-1,040,000	-4,485,000
Cash Flow From Continuing Investing Activities	-1,040,000	-4,485,000
Net Other Investing Changes	-56,000	-1,880,000
Net Investment Purchase And Sale	65,000	2,314,000
Sale Of Investment	209,000	219,000
Purchase Of Investment	-144,000	2,095,000
Net Business Purchase And Sale		-3,082,000	-1,000
Purchase Of Business		-3,082,000	-1,000
Net Intangibles Purchase And Sale	0	0
Purchase Of Intangibles	0	0
Net PPE Purchase And Sale	-1,049,000	-1,837,000
Purchase Of PPE	-1,049,000	-1,837,000
Operating Cash Flow	2,514,000	7,309,000
Cash Flow From Continuing Operating Activities	2,514,000	7,309,000
Change In Working Capital	-5,226,000	3,596,000
Change In Other Current Liabilities	-629,000	499,000
Change In Other Current Assets	349,000	1,486,000
Change In Payables And Accrued Expense	-3,920,000	1,266,000
Change In Inventory	-431,000	-46,000
Change In Receivables	-595,000	391,000
Changes In Account Receivables	-595,000	391,000
Other Non Cash Items	2,000	0
Stock Based Compensation	300,000	309,000
Provisionand Write Offof Assets	-8,000	5,000
Asset Impairment Charge	36,000	81,000
Deferred Tax	159,000	-3,677,000
Deferred Income Tax	159,000	-3,677,000
Depreciation Amortization Depletion	2,004,000	2,011,000
Depreciation And Amortization	2,004,000	2,011,000
Operating Gains Losses	12,000	-132,000
Gain Loss On Sale Of Business			-226,000
Net Income From Continuing Operations	5,235,000	5,116,000

📊 Quarterly mode — Graham Fair Value & 7 Criteria require annual data. Switch to Annual for full analysis.

Quarter vs Same Quarter Last Year

YoY strips seasonality

Revenue Growth (YoY)

Prior year: $21.9B ▲ $24.1B +9.9%

Revenue growth vs same quarter last year strips seasonality. Consistent double-digit growth is a Buffett hallmark.

Gross Margin

Prior year: 66.4% ▲ 66.3% -0.1pp

Buffett: consistent gross margin above 40% signals durable pricing power and competitive moat.

Operating Margin

Prior year: 29.2% ▲ 26.6% -2.6pp

Graham: operating margin reflects true business economics before financing. Trend matters as much as level.

Net Margin

Prior year: 50.2% ▼ 21.8% -28.5pp

Net margin can be distorted by one-time items, tax timing, or interest costs — compare to operating margin for signal quality.

Quarterly Health Checks

3 Graham/Buffett criteria that are valid and reliable on quarterly data

✅ Adequate Size

Graham required scale for resilience. Quarterly revenue × 4 gives an annualised proxy.

$24.1B/qtr (≈$96.2B ann.)

vs > $1.5B annualised revenue

❌ Financial Condition

Current assets vs current liabilities — a real-time liquidity snapshot. Valid and reliable on quarterly data.

1.03x current ratio

vs ≥ 2.0x

✅ Free Cash Flow

Buffett's most important single metric. A positive FCF quarter means the business generated real cash for owners after maintaining its asset base.

$1.5B

vs Positive

Operating Cash Flow

$2.5B

Latest quarter · Buffett's cash reality check

ROIC

3.5%

Based on latest annual operating income

Return on Invested Capital — Buffett's preferred measure for asset-light businesses. ROIC > 15% consistently signals a durable competitive advantage (moat). More meaningful than P/B for software, pharma, and consumer brand companies where most value is intangible and off-balance-sheet.

Market Cap / Net Assets

6.8x

Net Assets: $81.2B

⚠️ Net margin compressed 28.5pp vs same quarter last year. Common causes: one-time charges (restructuring, write-downs, legal settlements), tax rate changes, or rising interest expense. Check the income statement notes before drawing conclusions about operating health.

⚠️ Revenue grew vs prior year but operating margin contracted. Possible explanations: deliberate investment in growth (hiring, marketing, R&D), input cost inflation, or pricing pressure from competition. Buffett distinguishes between spending that builds moat vs. spending that doesn't.

Peers & Industry

No auto-detected peers for Drug Manufacturers - General. You can manually compare JNJ against any stock using the Compare tool.

"The management of a business is its most important single factor — more important than market position, patents, or financial structure."

— Benjamin Graham

Capital Allocation & Alignment

Insider Ownership

0.05%

Low — management has little skin in the game

Return on Equity (ROE)

6.4%

Weak — poor returns on equity

Return on Assets (ROA)

2.6%

Fair — average asset utilization

Share Buybacks (Latest Year)

$6.0B

Management is returning capital to shareholders via buybacks

Debt Trend YoY

+14.7% YoY

Debt is growing — management is leveraging up

Leadership Team

Joaquin Duato

CEO & Chairman

Age 62

Pay: $6,499,931

0.124% of net income

Jennifer Taubert

Executive VP & Worldwide Chairman of Innovative Medicine

Age 61

Pay: $3,313,021

0.063% of net income

John Reed , Ph.

Executive Vice President of Innovative Medicine and R&D

Age 67

Pay: $3,165,384

0.060% of net income

Timothy Schmid

Executive VP & Worldwide Chairman of MedTech

Age 55

Pay: $2,538,167

0.048% of net income

Guy Lebeau

Group Chairman of MD&D Business - EMEA

Top Institutional Holders

Institution	% Owned	Shares
Blackrock Inc.	8.86%	213,385,546
Vanguard Capital Management LLC	6.51%	156,605,370
State Street Corporation	5.54%	133,476,288
Vanguard Portfolio Management LLC	2.64%	63,514,436
JPMORGAN CHASE & CO	2.62%	63,096,344
Geode Capital Management, LLC	2.46%	59,164,862
Morgan Stanley	1.86%	44,721,167
State Farm Mutual Automobile Insurance Co	1.31%	31,590,952

Risk Analysis

Beta (Market Risk)

0.26

Low volatility — more stable than the market

Short Interest

1.1% of float

Low short interest — market is not heavily bearish

Debt-to-Equity

0.68x

Conservative balance sheet — low financial risk

Current Ratio

1.02x

Adequate liquidity

52-Week Price Range

Low: $149.04 Current: $228.39 High: $251.71

Currently at 77% of 52-week range

Johnson & Johnson

Metric Explanations

Full Graham Analysis

Income Highlights

Balance Sheet Highlights

Cash Flow Highlights

Quarter vs Same Quarter Last Year

Quarterly Health Checks

Operating Cash Flow

ROIC

Market Cap / Net Assets

Peers & Industry

Capital Allocation & Alignment

Leadership Team

Top Institutional Holders

Risk Analysis