Historical Trends Indicate Imminent Stock Market Recovery
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3 days ago
0mins
Should l Buy JNJ?
Source: NASDAQ.COM
- Opportunity for Recovery: Historical data indicates that major indexes typically experience significant gains in the 12 to 36 months following corrections, particularly during the third year of a presidential term, suggesting investors should seize this moment.
- Market Performance Patterns: Analysis by Charles Schwab from 1933 to 2015 reveals that the average returns of the S&P 500 show weaker performance in the first two years of a presidential term, with rebounds often occurring in the third year, highlighting the importance of recognizing this cyclical trend.
- Timing the Market: While buying stocks during downturns can be intimidating for many investors, history shows that such periods of anxiety often precede strong recoveries, encouraging investors to remain patient and ready to act.
- Long-Term Investment Strategy: For long-term investors, the best time to buy is always “now,” as the value of time in the market outweighs the importance of timing, with historical evidence suggesting that holding investments long enough will yield positive returns.
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Analyst Views on JNJ
Wall Street analysts forecast JNJ stock price to fall
20 Analyst Rating
13 Buy
7 Hold
0 Sell
Moderate Buy
Current: 240.100
Low
190.00
Averages
218.50
High
240.00
Current: 240.100
Low
190.00
Averages
218.50
High
240.00
About JNJ
Johnson & Johnson and its subsidiaries are engaged in the research and development, manufacture, and sale of a range of products in the healthcare field. The Company’s segments include Innovative Medicine and MedTech. The Innovative Medicine segment is focused on various therapeutic areas, including immunology, infectious diseases, neuroscience, oncology, pulmonary hypertension, cardiovascular and metabolism. Its products include REMICADE (infliximab), SIMPONI (golimumab), SIMPONI ARIA (golimumab), STELARA (ustekinumab), TREMFYA (guselkumab), EDURANT (rilpivirine), and INVEGA SUSTENNA/XEPLION (paliperidone palmitate). The MedTech segment includes a portfolio of products used in cardiovascular, orthopedics, surgery, and vision categories. The Cardiovascular portfolio includes electrophysiology products to treat heart rhythm disorders and circulatory restoration products (Shockwave) for the treatment of calcified coronary artery disease (CAD) and peripheral artery disease (PAD).
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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See More
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- Earnings Beat Expectations: Approximately 80% of S&P 500 companies have exceeded expectations according to FactSet, showcasing strong profitability and boosting market confidence.
- Rising Earnings Growth Rate: The first-quarter earnings growth rate stands at 12.4%, and if sustained, it would mark the sixth consecutive quarter of double-digit growth, reflecting robust economic recovery momentum.
- Attractive Tech Valuations: The S&P 500 tech sector's forward P/E ratio is around 22 times, below the five-year average of 25.9, indicating significant valuation compression relative to earnings, providing a favorable buying opportunity for investors.
- Market Rebound Potential: The S&P 500 is just 0.2% away from its all-time closing high, with corporate profits expected to rise about 17% for Q1, laying the groundwork for a return to historical peaks.
See More
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- ASML Surpasses Expectations: ASML's first-quarter results significantly exceeded expectations, and the company raised its 2026 guidance, indicating strong demand for semiconductor manufacturing equipment, which could further boost the stock prices of related companies.
- Morgan Stanley's Strong Quarter: Morgan Stanley reported substantial beats in equities and fixed-income trading, leading to a more than 2% increase in its stock price, showcasing its competitive edge in investment banking, with CEO Ted Pick's leadership gaining market recognition.
- Wells Fargo's Underwhelming Performance: Although Wells Fargo reported decent quarterly results, concerns over its private credit portfolio led analysts to lower its price target and remove it from their best ideas list, resulting in the stock stabilizing after a 5.7% decline.
- Johnson & Johnson Price Target Hikes: Following its earnings report, Barclays and Stifel raised Johnson & Johnson's price targets to $255 and $250 respectively, reflecting market optimism about its strong pharmaceutical portfolio, particularly driven by cancer treatments and Tremfya.
See More
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- Leading Investment Scale: Taiho Ventures maintains the largest fund size among Japanese pharmaceutical CVCs, focusing on supporting innovative therapeutics startups and leveraging its R&D and business management expertise to drive the societal application of cutting-edge technologies and therapies.
- Successful Investment Cases: Over the past decade, Taiho Ventures has invested in more than 30 innovative companies developing novel therapeutics and cutting-edge healthcare technologies, achieving multiple successful exits, including Dren Bio acquired by Sanofi and Halda Therapeutics acquired by Johnson & Johnson.
- Strengthening R&D Pipeline: Taiho Ventures' first portfolio company, Arcus Biosciences, granted Taiho Pharmaceutical exclusive licenses to five pipeline programs, significantly enhancing Taiho Pharmaceutical's R&D pipeline and advancing its strategic positioning in oncology.
- Global Investment Commitment: Taiho Ventures actively invests across the U.S., Europe, and Japan, utilizing an evergreen fund structure to ensure long-term investment support, and is dedicated to collaborating closely with entrepreneurs and innovators to advance transformative healthcare technologies that address unmet medical needs.
See More
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- Significant Performance Growth: Johnson & Johnson reported worldwide sales of $24.1 billion in Q1, reflecting a 6.4% increase despite a 540 basis point headwind from STELARA, demonstrating strong performance across multiple sectors.
- Innovation-Driven Pharmaceuticals: In oncology, DARZALEX achieved $4 billion in sales with an 18% growth, while the FDA's approval of TECVAYLI plus DARZALEX FASPRO positions the regimen as a potential new standard of care, further solidifying J&J's leadership in this area.
- Robust Financial Health: The company reported net earnings of $5.2 billion for the first quarter, with diluted earnings per share at $2.14 and adjusted diluted earnings per share at $2.70, showcasing a strong foundation in profitability and cash flow.
- Optimistic Outlook: J&J raised its operational sales guidance for 2026 to a range of 5.9% to 6.9%, anticipating sales to exceed $100 billion for the first time, reflecting the company's confidence in future growth and emphasis on new product launches.
See More
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- Importance of Economic Moats: During economic uncertainty, investors should focus on healthcare companies with wide economic moats to avoid value and safety traps, ensuring investment stability and long-term growth potential.
- Strong Financial Health: Both Becton, Dickinson and Johnson & Johnson have debt-to-equity ratios below 1 and are Dividend Kings with 54 and 64 years of annual dividend growth, demonstrating their financial resilience amid economic fluctuations.
- Demand for Medical Devices: The consistent demand for Becton, Dickinson's medical supplies and lab equipment from hospitals during both booms and busts indicates the company's stability and market demand in the medical device sector.
- Signal of Dividend Growth: Johnson & Johnson's medical technology and pharmaceutical segments possess a wide economic moat, as noted by analyst Karen Anderson, reflecting its ability to withstand risks during economic downturns.
See More
