JNJ
Johnson & Johnson
Dividend / Cash flow
★ Quality 72/100Price today
$252.31
what the market pays
Worth
$169.44
calculated cycle value
Price is 49% above its value
charlieapp.co
Price vs Intrinsic Value
The line is the price month by month; the green band marks when it's undervalued (−20% off value). When the price drops in there, the discount is real, not opinion.
Where does the value come from?
Established business paying dividends
$178.38
per share
How it's calculated
62 years of dividends. Pure MedTech+Pharma post-Kenvue. pharmaRD 20%. Pipeline OTTAVA, RYBREVANT. FCF $19.7B. WAIT.
Net cash in the bank
cash minus financial debt, per share
Total calculated value
business + cash
How many times the cash flow
Dividend / Cash flow · vs 42 peers
You pay 32.2x times this business's cash flow; its sector median is 25.7x.
32% above what Charlie thinks it's worth (22x) — you're overpaying, sector or no sector.
Why Overvalued?
Its free cash flow is $8.11/share × 22.0x multiplier minus $8.94 in negative net cash = $169.44 in intrinsic value. Today's price of $252.31 is 33% above the calculated value — the market is paying a premium over what the model sees as fair.
The price is 49% above the calculated value. You're paying more than it's worth.
Buying here lowers your expected return and wipes out the safety margin.
The next reasonable entry zone starts at $160.97.
At what price would buying make sense?
Entry zones
🟢 Undervalued
≤$135.55
-20% off Value
🟡 Discounted
≤$160.97
-5% off Value
🔴 Today
$252.31
-33% Valor
Overvalued
The market prices it too high versus what the business makes. Patience pays off here.
“Time is the friend of the wonderful company, the enemy of the mediocre.”
— Warren Buffett
Model updated · July 2026
The business
Scalpels, surgical robots, and patented molecules: it charges to operate on you and to cure you.
After spinning off Kenvue (consumer brands), J&J became a pure drug and medical-technology business. It sells patented medicines and operating-room equipment to hospitals and health systems across half the world. It booked $94.2B with a 68% gross margin and turned $19.7B into free cash flow.
The moat comes from patents with 20 years of exclusivity and from clinical trust: a surgeon doesn't switch instruments on a whim. It reinvests close to 20% of pharma sales into research, which feeds the next product cycle. It's not a monopoly; it's scale, brand, and switching costs.
Revenue history
From $94.9B to $98.0B in 4 years. Sales aren't taking off — the engine is stuck.
Where each $100 of sales goes
Revenue $94.2B · FY2025
Of every $100 in sales, $71 goes to costs and operations; $29 is left as net profit (29% margin).
Catalysts and risks
OTTAVA, its surgical robot, entering to compete against Intuitive's da Vinci.
RYBREVANT gaining ground in lung cancer as a pharma growth engine.
62 straight years raising the dividend, backed by $19.7B in free cash flow.
Talc litigation: thousands of lawsuits still without a final number.
Stelara patent expiration: biosimilars are already eroding that revenue.
Modest real growth after the Kenvue exit; the pipeline has to deliver.
Charlie's note
“Paying 22 times cash flow for a business growing 7% with 68% margins and 62 years of paying dividends is a sensible person's price. Rushing doesn't pay here: the quality is already priced in, so waiting for a better entry point is the boring, correct play.”
Analysis · July 2026
So when would be a good price for Johnson & Johnson?
By our calculation, not yet. We will email you the day it drops to $160.97 — so you do not have to keep checking.
🔔 Email meFree · no card
Charlie informs, it doesn't advise. No information should be taken as a recommendation to buy or sell.