Stock Profile and Earning Report

1/22/2019

Ticker: JNJ Johnson & Johnson

Combo Rank (Nov 30, 18) 27.5% Pharmaceuticals Biotechnology & Life Sciences
Pharmaceuticals

FS Core 37.9% MOMENTUM 53.1% GROWTH 67.9% Tuan Nguyen

Free Cash Flow Yield 4.90 3y BetaMo 0.30 SlsGro% LTM 9.29
Oper CF Yld 5 Yr 4.68 StdDev Wkly 52W 21.14 SlsGro% 17' 6.32
Entrpr Value/ EBIT 20.44 6 MO % Pchg 16.47 SlsGro% 16' 2.47
FCF / EV 4.75 6Mo/6Mo ago % Pchg -9.74 SlsGro% 15' -5.56
Accurals per NDR -3.63 1Mo Chg% 6.91 NetIncGro% 3yr avg 0.24
Est Rev 3 mo FY1 0.26 OCF PS Gro% 3 yr avg 0.04
Up/Down No. Est FY1 0.00 VALUE 85.0% EPS Growth qoq% 0.05
Up/Dn LTG Estimate 5.56 FCF/Yield 0.05 EBITDA qoq% 0.13
Return on Avg Invest Capital 1.58 P/OCF ps 17.76 NetIncMgn% yoy -91.1 Johnson & Johnson (NYSE: JNJ)
CF Ret on Tot Invest Capital 22.66 P/E Est 4Q forward 17.11 FCF 4Qyoy% 0.00
Net Income Margin 1.90 Price/Sls ps 4.82 LTG% 7.55 Johnson & Johnson manufactures health care
Common Equity %Total Assets 38.24 EV/ EBITDA 14.56
Cash Oper / Tot Ass per shr 3.96 Price / Book Value 5.74 BAL SHT STRESS 25.2% products and provides related services for the
EBIT / TA per shr 12.20 Cash vs LTD 0.6569
Gross Inc/ Tot Ass 34.26 REVISIONS 29.2% FCF v LTD 0.6265 consumer, pharmaceutical, and medical devices
Sls Gro Hist 3 yr 1.88 Buy - Sell Ratio -0.05 FCF v Sls 0.23 and diagnostics markets. The Company sells
Q2 EstRev 0.12 OCF v Dividend Paid 2.3624
BB Core 14.8% Q1 EstRev -0.04 EBITDA v Int Exp 23.2 products such as skin and hair care products,
2 MO EPS Revision Rank 603 EstRev FY2 3Mo 0.00 LTD / Mkt Cap 0.1 acetaminophen products, pharmaceuticals,
3 MO EPS Revision Rank 505 EstRev FY1 3m ago 0.00 LTD / TA 0.2
6 MO EPS Revision Rank 610 Up-Dn / Total 1.00 Altman Z Score 4.5 diagnostic equipment, and surgical equipment
Oper Cashflow/ Assets Rank 356 SlsGd 3m ago 0.004 Cash / TA 0.12 in countries located around the world.
CAPEX / NET SALES Rank 987 OCF Rev 3mo ago% -0.060
Gross Profit / Total Assets Rank 452 Gd EPS 3m% 0.011 SHARE ACIVITY 30.6%
Ebit / Total Assets Rank 341 PrTgt 3moago% 0.03 Share Buyback 0.99 Key Segments: Consumer, Pharmaceuticals,
ROIC Rank 343 Gd Shr Repur #N/A and Medical Devices
BB EST LT EPS Growth Rank 1286 EFFICIENCY 76.2% Shr Rep Act #N/A
Cash Position Rank 514 GrossInc Mgn 66.27 InsSel Cum3m ago #N/A
Accruals Ratio Rank 151 NetInc Mgn 1.90 Key Brands:
R&D / Assets Rank 613 ROE 1.99 INCOME 53.0%
EV / Free Cash Flow Rank 401 EPS/BV 0.02 Div Yield 2.3762
Free Cash Flow Yield Rank 616 ROIC 1.42 LTDebt /EBITDA 1.07 Consumer: Tylenol, Neutrogena, Aveeno…
Operating Cash Flow Yield Rank 1111 ROTA 0.87 LTD /EBIT 1.44
EV / EBITDA Rank 1178 Net Sales/TA
CFO/Sls LTM
0.52
0.27
FCF/Div Cov
CFO/ Div Cov
1.9777
2.3624
Pharmaceuticals: Zytiga, Stelara, imbruivica…
PULSE 99.1% FCF/TA 0.12 Cash & ST /Div 2.0735
Days Held 189.07 SlsLTM /Empl 0.61 Div Payout 696 Medical Devices: JnJ Vision, Biosen Webster,
SIR %Flt 0.54 GrossMgn LTM Mom 0.99 Altman Z Score 4.21
SIR DTC 1.72 NetMgn LTM Mom 0.26 EBITDA Oper/ Int Exp 23.242 Ethicon…
EBIT Int Cov 17.267

EARNING REPORT
Johnson and Johnson reported Q4 with results and guidance:
Revenue of $20.39B (+0.9% Y/Y) vs. $20.2B est., beats by $190M (0.94%). Q4 Non-GAAP EPS of $1.97 vs $1.95 beats by $0.02 (1%); GAAP EPS
of $1.12 vs. $1.95 misses by $0.83 (43%).

J&J forecast 2019 earnings of between $8.50 and $8.65 per share and revenue in the range of $80.4 billion to $81.2 billion. Analysts previously said
they expected earnings of $8.60 per share and $82.69 billion in revenue.

EARNING COMMENTARIES

By segment, Worldwide Consumer sales came in at $3.536 billion, which was in line with the consensus. Breaking down operational growth one step
further to exclude acquisition and divestitures (organic), worldwide sales advanced 3.8%, driven by a 5.5% rise in the U.S. and a 2.8% increase
outside the U.S. Johnson & Johnson continues to see strong share gains in the e-commerce channel, helping the company achieve strong double-digit
growth across all regions. Meanwhile, Beauty posted strong results with sales increasing 4.5% (when adjusted for the impact of the Nizoral divesiture)
on strength in Aveeno and Neutrogena in the U.S. and the expansion of the Vogue portfolio outside the U.S.

Worldwide Pharmaceutical sales were $10.19 billion, edging the consensus of about $10.02 billion. On a reported basis, year over year, sales increased
5.3%, but grew 7.2% on an operational basis, which excludes the impact of translational currency. Breaking down the operational results one step
further to exclude acquisition and divestiture (organic), worldwide sales increased 7.2%, driven by a 2.8% rise in the U.S. and 13.7% growth outside
the U.S.

Worldwide Medical devices sales came in at $6.668 billion, slightly below the consensus of $6.716 billion consensus. The Devices sales figure, year
over year, represented a decline of 4.4% on a reported basis and a drop of 2.2% on an operational basis which excludes the impact of translational
currency. Excluding the net impact of acquisitions and divestitures on an operational basis (organic), worldwide sales increased 3.3%, driven by a
1.0% increase in the U.S. and 5.4% growth outside the U.S.. That 3.3% organic growth is an acceleration from the third quarter 2018 rate of 2.9%,
and thus, provides validation to management's plan to improve the business.

Bottom line: JNJ came in the quarter with strong results as in Consumer, management expects to grow slightly above the market rate, continue to
build their e-commerce and digital capabilities with focus on both global and local markets, while also expand margins. For Pharmaceuticals, the
company had seven key products deliver double-digit sales growth during the quarter, keeping the division's above-market growth rate intact. Most

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 Stock Profile and Earning Report
1/22/2019
notably, sales in the oncology portfolio rose about 25% on continued strength in Darzalex (60% sales increase globally with share gains in the U.S.
and EU). As for Zytiga, growth slowed to about 6% ($786 million in sales, below consensus of $885 million) as the 27% increase outside the U.S
was partially offset by the roughly 13% decline in the U.S. due to generics. Immunology sales increased 9.7% off strong performance in Stelara ($1.44
million in sales vs. $1.355 consensus) for which market share increased in the U.S. In Medical Devices, it appears that the momentum built over the
last two quarters is expected to continue into 2019 as management said they expect to "accelerate growth through improved execution and enhance
the flow and value of innovation, which includes the progression of digital platforms," and they expressed their commitment to improving Orthopedics.
The company also announced a partnership with AAPL for compatibility with the Apple Watch for heart devices, thus further expand JNJ customer
base. The guidance here is subjectively viewed as conservative, as JNJ should be comfortably beat it with many products and drug launches this year.
JNJ is BUY at this level due to mispriced growth.

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