Johnson & Johnson: Shorts Half Of Trading Vol (Technical Analysis)

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Introduction

Johnson & Johnson (NYSE:JNJ) is an American multinational corporation founded in 1886 that develops medical devices, pharmaceuticals and consumer packaged goods.

As markets weaken, JNJ has traditionally shown strength in bear markets. Today, this company has recently scandals that have weakened stock prices in recent months.

fundamental strength

It looks like moving on to next year; income will increase. Net profit should also increase.

ANNUAL ESTIMATES

2022

2023

2024

2025

2026

Revenue

95 188

98,690

101 100

102,630

104,902

Dividend

4.37

5.19

5.46

Dividend yield (in %)

2.68%

2.81%

2.92%

3.19%

3.35%

PES

10.09

10:55

10.94

11.24

11:50 a.m.

P/E ratio

16.14

3:43 p.m.

14.88

2:48 p.m.

14.16

EBIT

30,088

31,991

33 123

33,853

34,671

EBITDA

34,002

36,000

37,539

39,318

43,241

net profit

26,771

27,767

28,797

29,387

30,083

Adjusted net profit

26,771

27,767

28,797

29,387

30,083

Source: Business Insider

Reports

All of the primary fundamental ratios for the past two years are showing strength since 2021, as the deployment of Johnson & Johnson’s Janssen COVID vaccine has helped keep financial ratios more stable in those years during the pandemic.

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2017

2018

2019

2021

2022

Period

AF

AF

AF

AF

AF

Current ratio

2.474

1.474

1.259

1.206

1.348

Quick report

2.039

1.082

0.939

0.912

1.037

Cash ratio

0.349

0.193

0.153

0.329

0.320

Mixed News and Catalyst

Sustainability

Durability is set at average performance, making JNJ below standard for potential long-term investment. As you know, many institutional investors will be forced to invest only in companies that outperform over the long term.

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Assess

Social Rating

15.79

Number of peers

82

Governance note

8.55

total

25.08

The biggest controversy

4

ESG performance

AVG_PERF

percentile

44.38

peer group

Medications

Environmental Rating

0.74

Source: Yahoo Finance

Target pricing

Recent target prices have risen after a slight dip (from around $180 to around $160) over the summer. I question the slightly higher price targets, but given that the reduction is not as steep as other stocks, it looks like a bottoming process might be setting in.

jnj price vs target

JNJ Price vs Target (Custom Platform)

Source: Business Insider

Recommendation

It seems that there are more sell recommendations from various market analysts. There are also a smaller number who have decided to go neutral. Therefore, I leave this JNJ stock on hold.

Interval

RECOMMENDATION

TO BUY

SALE

NEUTRAL

A month

STRONG_SELL

1

17

8

One week

SALE

2

15

9

One day

SALE

2

14

ten

4 hours

SALE

6

11

9

1 hour

SALE

3

14

9

15 minutes

SALE

1

15

ten

5 minutes

SALE

6

12

8

1 minute

NEUTRAL

9

seven

ten

Source: Trading View

Price vs Short Volume

About 50% of the total traded volume is short volume. This means there is more neutrality on JNJ, which helps support holding this stock.

jnj short volume vs full volume

JNJ Short Volume vs Full Volume (Custom Platform)

Source: StockGrid

Insider activity

There are no purchases of this stock outside of sales.

It should be noted that CEO Mongon Thibaut has sold many shares this summer.

2022-06-09

40,000.00

111,310.87

72.54

To buy

Nope

Mongon Thibaut

2022-06-09

100.00

111,210.87

173.0

Sale

Nope

Mongon Thibaut

2022-06-09

174.00

111,036.87

173.0

Sale

Nope

Mongon Thibaut

2022-06-09

6,600.00

104,436.87

173.0

Sale

Nope

Mongon Thibaut

2022-06-09

33,126.00

71,310.87

173.0

Sale

Nope

Mongon Thibaut

Source: Business Insider

Technical analysis

Fibonacci

Momentum has slowed after a choppy uptrend that began in May 2020. It may not take long to fully recover from this decline, but when a CEO insider sells, it makes you wonder what they know .

jnj fibonacci

JNJ Fibonacci (custom platform)

Bollinger Bands

The upper and lower bands are narrow around the actual JNJ stock price. Narrow bands mean there is low volatility relative to other stocks.

jnj bollinger group

JNJ Bollinger Band (custom deck)

MACD

Note the lower panel of the yellow MACD line of recent activity from late September. It hit the zero line and started to decline again. This suggests that JNJ will continue to decline with little momentum in price. This could be due to the correlation of the negative performance of larger US equity indices.

jnj macd

JNJ MACD (custom platform)

Risky Questionable Business Practices

Two outstanding issues concern the outfit of JNJ with:

Talcum Powder Trial

J&J is trying to block baby powder lawsuits from 40,000 patients. A court has a question.

Antitrust Business Practices

J&J and Alcon pay $75 million to end contact lens antitrust case.

The talc scandal undermines the investment attractiveness of Johnson & Johnson’s pharmaceutical business.

Could this negative news lead to JNJ in the long run? I think the stock price would have fallen more steeply had this event not occurred.

Will the $5 billion buyout stabilize JNJ’s price? It was announced a few weeks ago.

J&J Plans $5 Billion Share Buyback Program; confirms the outlook for FY22.

Conclusion

There are mixed signals in fundamental analysis, including strengthening earnings and profitability. There is a high risk of acquiring Johnson & Johnson stock with a pending lawsuit and questionable antitrust business activity. Technical research shows that JNJ has not been negatively impacted compared to other major stocks. A buyback program can help minimize declines. As with those mixed views, I recommend holding this stock until major positive news and stock reports turn positive.

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