Healthcare company Johnson & Johnson (NYSE:JNJ) has been a solid investment over the long run. Over the last 10 years, its share price has risen from around $90 to $157. Here, we are going to look at where the S&P 500 healthcare stock could be trading in 2030. Let’s make some share price projections for the company.
What will the stock price be for Johnson & Johnson in 2030?
It’s impossible to know exactly where JNJ stock will be trading in 2030 as share prices are notoriously unpredictable. However, we can make some estimates based on growth in earnings per share (EPS).
For 2024 and 2025, Wall Street analysts expect Johnson & Johnson to generate EPS of $10.70 and $11.00 respectively. Let’s assume these forecasts are accurate.
2030 JNJ share price forecast
Let’s then assume that after this, JNJ can grow its EPS by 6% per year out to 2030. I think that’s a fair assumption. That’s roughly in line with its EPS growth over the last decade. And the company has said that it is aiming for revenue growth of 5-7% per year between 2025 and 2030.
If the company was able to grow its earnings by 6% out to 2030, it would take its EPS to $14.72. That would represent growth of 38% on the figure forecast for 2024.
The next step is to apply an earnings multiple to this EPS forecast to obtain a share price forecast. Personally, I feel that a multiple of about 17 is about right for this company. So, that gives us a share price forecast of $250.
However, it’s worth considering lower and higher multiples. If we apply a multiple of 15 to the EPS forecast, we get a share price forecast of $221. If we go with a multiple of 20, we get a share price forecast of $294.
What is the intrinsic value of Johnson & Johnson stock?
As for the intrinsic value of Johnson & Johnson stock today, I put it at about $180. I have calculated that figure by applying a price-to-earnings (P/E) ratio of 17 to the EPS forecast for 2024. My figure is roughly in line with the average Wall Street analyst price target at present ($176).
Is JNJ a good investment?
Is Johnson & Johnson stock a good investment today? I believe so.
This is a diversified company that has exposure to multiple areas of healthcare including pharmaceuticals and medical technology. And it’s well positioned to benefit from a number of dominant themes in the years ahead including the ageing of the global population.
It’s also a reliable dividend payer. Believe it or not, the company has now increased its payout every year for over 60 years. As a result of this track record, it’s classified as a ‘Dividend Aristocrat.’ Currently, the stock’s yield is about 3.2%.
Overall, I see Johnson & Johnson as a blue-chip company with good long-term prospects. And trading on a P/E ratio of 14 today, I think the company has a lot of appeal from an investment perspective.
Based in London, Edward is a distinguished investment writer with an extensive client portfolio comprising a diverse array of prominent financial services firms across the globe. With over 15 years of hands-on experience in private wealth management and institutional asset management, both in the UK and Australia, he possesses a profound understanding of the finance industry.
Before establishing himself as a writer, Edward earned a Commerce degree from the prestigious University of Melbourne. Complementing his academic background, he holds the esteemed Investment Management Certificate (IMC) and is a proud holder of the Chartered Financial Analyst (CFA) qualification.
Widely recognized as a sought-after investment expert, Edward’s insightful perspectives and analyses have been featured on sites such as BlackRock, Credit Suisse, WisdomTree, Motley Fool, eToro, and CMC Markets, among others.
