Description of the Company and Business Segments
Johnson & Johnson and its subsidiaries (the Company) have approximately 152,700 employees worldwide engaged in the research and development, manufacture and sale of a broad range of products in the healthcare field.
The Company is organized into three business segments: Consumer Health, Pharmaceutical and MedTech. The Consumer Health segment includes a broad range of products used in the Baby Care, Oral Care, Skin Health/Beauty, Over-the-Counter pharmaceutical, Women’s Health and Wound Care markets. These products are marketed to the general public and sold online (eCommerce) and to retail outlets and distributors throughout the world. The Pharmaceutical segment is focused on the following therapeutic areas, including Immunology, Infectious diseases, Neuroscience, Oncology, Pulmonary Hypertension, and Cardiovascular and Metabolic diseases. Products in this segment are distributed directly to retailers, wholesalers, distributors, hospitals and healthcare professionals for prescription use. The MedTech segment includes a broad portfolio of products used in the Orthopaedic, Surgery, Interventional Solutions (cardiovascular and neurovascular) and Vision fields. These products are distributed to wholesalers, hospitals and retailers, and used principally in the professional fields by physicians, nurses, hospitals, eye care professionals and clinics.
Assets structure analysis
Johnson & Johnson(JNJ) reported $187.3 billion at January 1,2023, compared with $182 billion at January 2,2022.
The intangible assets, net was $48.3 billion at January 1,2023 ,which accounted for 25.7% of total assets.
The goodwill was $45.2 billion at January 1,2023,which consisted of 24.1% of total assets.
The property, plant and equipment, net was $19.8 billion at January 1,2023,wich comprised 10.5% of total assets.
The total current assets amounted to $55.2 billion at January 1,2023,including cash and cash equivalents, marketable security, accounts receivable trade, inventories and prepaid expenses and other receivables.
The cash and cash equivalents, marketable security, accounts receivable trade, inventories and prepaid expenses and other receivables accounted for 7.5%,4.5%,8.6%,6.6% and 1.6% of total assets, respectively.
Liquidity and solvency analysis
The total current liabilities was $55.8 billion at January 1,2023.The current ratio was about 0.99,which was lower than 2:1.
The total liabilities was $110.5 billion at January 1,2023.The debt ratio was 58.9%,which is not bad ,but the amount of intangible asset and goodwill have high proportion of total assets.
However, net cash flows from operating activities was $21.1 billion,$23.4 billion and $23.5 billion in fiscal 2022,in fiscal 2021 and in fiscal 2020, respectively. The net cash flows from operating activities could service the debt.
Profitability analysis
Johnson & Johnson(JNJ) reported sales to customer of $94.9 billion,$93.7 billion and $82.5 billion for fiscal 2022,2021 and 2020,respectively.
The sales in 2022 was up $1.2 billion or about 1.2%.
The sales in 2021 was up $11.2 billion or 13.5%.
The sale growth in 2022 was flat .
The net earnings was $17.9 billion,$20.8 billion and $14.7 billion for 2022,2021 and 2020,respectively.
The net profit margin was 18.8%,21.7% and 17.8% for 2022,2021 and 2020,respectively.
The return on stockholder’s equity was 23.3% for 2022.
The return on asset was 9.5% for 2022.
Cash flow analysis
Johnson & Johnson(JNJ) generated $21.1 billion in net cash flows from operating activities in fiscal 2022.
The additions to property, plant and equipment was $4 billion in 2022.
The free cash flows was $17.1 billion for 2022.
The acquisitions, net of cash acquired was $17.6 billion,$60 million and $7.3 billion in 2022,2021 and 2020,respectively.
We could see that acquiring is usual action, which may consume a lot of cash.
The dividends to shareholders was $11.6 billion in 2022 and the repurchase of common stock was $6 billion in 2022. That show Johnson & Johnson(JNJ) value stockholders ’interests.
The proceeds from short-term debt was $16.1 billion in 2022, and repayment of short-term debt $6.5 billion in 2022. That indicate the firm borrow new debt to repay old debt.
Johnson & Johnson(JNJ)’Q3,2023.
Johnson & Johnson(JNJ) reported total asset of $166 billion ,$187.3 billion at October 1,2023, and January 1,2023. The total asset drop slightly, because Johnson & Johnson(JNJ) separated Kenvue.
The net earning from discontinued operations, net of tax was $21.9 billion in the nines months ended October 1,2023,because Kenvue completed IPO.
Summary
Johnson & Johnson(JNJ)’s stock price is $161.53 per share ,but we believe Johnson & Johnson(JNJ) is overrated.
We reckon that Johnson & Johnson(JNJ)’share price is worth $83 per share.
The content is for reference only, not advice.
