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Johnson & Johnson JNJ

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Morningstar’s Analysis

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

J&J's COVID-19 Vaccine Receives FDA Authorization, Adding Support for U.S. Herd Immunity by Summer

Damien Conover, CFA Sector Director

Analyst Note

| Damien Conover, CFA |

The Food and Drug Administration has authorized Johnson & Johnson’s COVID-19 vaccine on the basis of strong clinical efficacy and safety, but we don’t expect any change to our fair value estimate as the vaccine will be distributed on a nonprofit basis. However, this remarkable speed to market (joining Pfizer/BioNTech’s and Moderna’s COVID-19 vaccines) shows the innovative power of the drug industry, a key pillar in the moats for the large drug firms. Also, the development of the vaccines creates goodwill that should reduce pressure from ongoing U.S. drug pricing policy plans, which continue to be a major headwind weighing on the industry’s valuation.

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Company Profile

Business Description

Johnson & Johnson is the world's largest and most diverse healthcare firm. Three divisions make up the firm: pharmaceutical, medical devices and diagnostics, and consumer. The drug and device groups represent close to 80% of sales and drive the majority of cash flows for the firm. The drug division focuses on the following therapeutic areas: immunology, oncology, neurology, pulmonary, cardiology, and metabolic diseases. The device segment focuses on orthopedics, surgery tools, vision care, and a few smaller areas. The last segment of consumer focuses on baby care, beauty, oral care, over-the-counter drugs, and women’s health. Geographically, just over half of total revenue is generated in the United States.

Contact
One Johnson and Johnson Plaza
New Brunswick, NJ, 08933
T +1 732 524-0400
Sector Healthcare
Industry Drug Manufacturers - General
Most Recent Earnings Dec 31, 2020
Fiscal Year End Dec 31, 2020
Stock Type Slow Growth
Employees 136,400

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