Why Johnson & Johnson Stock Is Up By 3% Today
Johnson & Johnson Stock Rallies After Strong Q3 Report
Shares of Johnson & Johnson gained strong upside momentum after the company released its third-quarter results. Johnson & Johnson reported revenue of $23.34 billion and adjusted earnings of $2.60 per share, missing analyst estimates on revenue and beating them on earnings.
The company noted that timing of coronavirus vaccine shipments led to a revenue miss and added that missed sales will be carried into future quarters.
Johnson & Johnson adjusted its 2021 reported sales guidance from $93.8 billion – $94.6 billion to $94.1 billion – $94.6 billion. Adjusted EPS guidance was also increased from $9.50 – $9.60 to $9.77 – $9.82. The market reacted favorably to the new guidance, and the stock managed to get further away from recent lows.
It should be noted that Jonhson & Johnson’s coronavirus vaccine booster shot was recently recommended for emergency use authorization by U.S. FDA Advisory Committee, so it will likely be approved soon, which may create an additional positive catalyst for the stock.
What’s Next For Johnson & Johnson Stock?
Currently, analysts expect that Johnson & Johnson will report earnings of $9.66 per share in 2021, so the company’s new guidance exceeds analyst forecasts, which is bullish for the stock.
In 2022, Johnson & Johnson is expected to report earnings of $10.42 per share, so the stock is trading at 16 forward P/E, which looks reasonably cheap in the current market environment as S&P 500 is moving to historic highs.
The stock made an attempt to settle above the $180 level back in August but lost momentum and declined towards the $160 level. It has received material support near this level before the release of the third-quarter earnings report, so traders looked ready to buy Johnson & Johnson shares after a more than 10% pullback.
The solid quarterly report and the new guidance will provide another incentive to buy Johnson & Johnson shares at a discount to August price levels, so the stock has good chances to develop additional upside momentum in the upcoming trading sessions.
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