JNJ
Johnson & Johnson
$253.79
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 64.4% above fair value
You pay
$253.79
Bear
$132.36
Fair
$154.42
Bull
$176.48
Bear
$132.36
-47.8%
$11.03 × 12x P/E
Fair
$154.42
-39.2%
$11.03 × 14x P/E
Bull
$176.48
-30.5%
$11.03 × 16x P/E
Adjust Assumptions
14.0x
11.03$
Key Value Driver
Normalized P/E multiple (14x base case)
Implied Market Multiple
23.0x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (40 analysts)
$284.33
Divergence from AlphaVal
46%
Summary
Applying a 14x P/E to adjusted EPS of $11.03, the base-case value is $154.42 per share. DDM cross-check: $126.34.
Warnings
Wall Street's average price target is $284.33 (from 40 analysts). Our estimate is 46% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples