Financial and Strategic Analysis of Johnson & Johnson: Evaluating Growth, Valuation, and Strategic Resilience_Vol. 2 No. 6 (JBM 2025)_Journal of Business and Marketing (ISSN: 3005-5717)

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Financial and Strategic Analysis of Johnson & Johnson: Evaluating Growth, Valuation, and Strategic Resilience

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DOI: https://doi.org/10.62517/jbm.202509613

Author(s)

Yuxuan Wang

Affiliation(s)

Western University, Western University, London, Ontario, N6A 3K7, UK

Abstract

This paper conducts a comprehensive financial and strategic evaluation of Johnson & Johnson (J&J) between 2019 and 2024. Using a mixed-methods approach that combines ratio analysis, discounted cash flow (DCF) modeling, and sensitivity testing, the study assesses profitability, solvency, and intrinsic valuation. Data are sourced from J&J's SEC filings, Bloomberg terminal, and Macrotrends datasets [1,6-7]. Quantitative results indicate an average Return on Assets (ROA) of 10.2% and Return on Equity (ROE) of 22.6%, suggesting strong operational efficiency and shareholder returns. The DCF valuation, applying a WACC of 7.2%, cash flow growth rate of 5%, and terminal growth rate of 2.5%, estimates an intrinsic share value of $192, compared to a market price of $168, implying moderate undervaluation. Sensitivity analysis confirms robustness across WACC (6.5–8.0%) and growth scenarios (4–6%). Qualitative interpretation connects these financial insights to J&J's post-Kenvue spin-off strategic realignment, highlighting its emphasis on innovation, ESG leadership, and risk diversification. The integrated analysis underscores J&J's financial resilience and sustainable growth trajectory, positioning it as a long-term "buy" candidate within the healthcare sector.

Keywords

Financial Analysis; Strategic Management; Johnson & Johnson; DCF Valuation; Healthcare Industry; ESG Strategy

References

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