Value
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 4.8 |
| P/S | 6.4 |
| EV/EBITDA | 1.7 |
| Fwd P/E | 7.0 |
| PEG | 3.7 |
| Analyst target | 5.0 |
- ▸Forward P/E: 18.2x
- ▸PEG: 3.01
JNJ · Why this verdict
Why Johnson & Johnson (JNJ) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.5/10
ConfidenceMEDIUM
MacroCAUTIOUS
TrendMatrix Research · core thesis
Engine thesis — one sentence
JNJ shows quality-resilience (V7 bonus +0.2, Q=7.1) with wide moat and BREAKOUT setup (golden cross, RSI 68), but V9 ASYMMETRY:-0.4=NEGATIVE and V8 'Target reached (-2.3% upside)' plus weak growth (2.5) trigger NO_EDGE and AVOID — maintain only.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Engine signal |
|---|---|---|
Quality subscore of 7.1 with ROE 26%, margins 22%, wide economic moat (moat=7.6), and 'Compounder quality' note earns the V7 quality-resilience bonus of +0.2 in RISK_OFF regimes. Bull case (item 1) | Quality subscore stays >= 7.0 and moat component holds above 7.0 across 4 quarters. | →stable |
| CounterQuality.notes flags 'Rule of 40: 23 (fail)' and 'Earnings quality warning: 59% FCF/NI' — quality may be cosmetic above the surface. | ||
Sector modifier (Healthcare): +0.5 (bull_case[1]) provides a structural defensive premium during RISK_OFF regimes. Bull case (item 2) | Healthcare sector modifier stays positive (>= +0.3) across the next 4 refreshes. | →stable |
| CounterSector tailwinds are regime-dependent; a shift to RISK_ON could flip the modifier negative as capital rotates to growth. | ||
V9 setup_type=BREAKOUT with rationale 'Golden cross, above all MAs, RSI 68, MACD bullish' plus momentum subscore 7.1 and rising OBV (volume accumulation) confirm institutional buying. Setup type | Momentum subscore stays >= 6.5 with OBV component holding at 10/10 for 2 quarters. | →stable |
| CounterRSI 68 is approaching overbought; bollinger component at 0.0 suggests price is stretched and a mean-reversion pullback is likely. | ||
Bear_case flags 'Weak growth' with growth subscore 2.5, earnings_growth component 0.0/10, and PEG 3.05 — the engine cannot find a growth path. Bear case (item 2) | Growth subscore must climb above 4.5 with earnings_growth component above 4.0 over 4 quarters to remove this headwind. | →stable |
| CounterDefensive compounders rarely score well on growth; the score may permanently underweight JNJ's stable revenue base. | ||
V9 ASYMMETRY:-0.4=NEGATIVE with current_price $233 above take_profit $229.47, V8 explicitly flags 'Target reached (-2.3% upside)' — no reward setup remains at spot. Engine gate (failed) | Analyst take_profit advances above $255 (~10% above spot) to restore asymmetry_ratio above 1.0. | →stable |
| CounterAnalyst targets often re-rate upward after sustained breakouts; technicals are bullish and TP may catch up. | ||
Quality subscore of 7.1 with ROE 26%, margins 22%, wide economic moat (moat=7.6), and 'Compounder quality' note earns the V7 quality-resilience bonus of +0.2 in RISK_OFF regimes.
→stableBull case (item 1)
- Expectation
- Quality subscore stays >= 7.0 and moat component holds above 7.0 across 4 quarters.
CounterQuality.notes flags 'Rule of 40: 23 (fail)' and 'Earnings quality warning: 59% FCF/NI' — quality may be cosmetic above the surface.
Sector modifier (Healthcare): +0.5 (bull_case[1]) provides a structural defensive premium during RISK_OFF regimes.
→stableBull case (item 2)
- Expectation
- Healthcare sector modifier stays positive (>= +0.3) across the next 4 refreshes.
CounterSector tailwinds are regime-dependent; a shift to RISK_ON could flip the modifier negative as capital rotates to growth.
V9 setup_type=BREAKOUT with rationale 'Golden cross, above all MAs, RSI 68, MACD bullish' plus momentum subscore 7.1 and rising OBV (volume accumulation) confirm institutional buying.
→stableSetup type
- Expectation
- Momentum subscore stays >= 6.5 with OBV component holding at 10/10 for 2 quarters.
CounterRSI 68 is approaching overbought; bollinger component at 0.0 suggests price is stretched and a mean-reversion pullback is likely.
Bear_case flags 'Weak growth' with growth subscore 2.5, earnings_growth component 0.0/10, and PEG 3.05 — the engine cannot find a growth path.
→stableBear case (item 2)
- Expectation
- Growth subscore must climb above 4.5 with earnings_growth component above 4.0 over 4 quarters to remove this headwind.
CounterDefensive compounders rarely score well on growth; the score may permanently underweight JNJ's stable revenue base.
V9 ASYMMETRY:-0.4=NEGATIVE with current_price $233 above take_profit $229.47, V8 explicitly flags 'Target reached (-2.3% upside)' — no reward setup remains at spot.
→stableEngine gate (failed)
- Expectation
- Analyst take_profit advances above $255 (~10% above spot) to restore asymmetry_ratio above 1.0.
CounterAnalyst targets often re-rate upward after sustained breakouts; technicals are bullish and TP may catch up.
Per-dimension breakdown
Quality
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 8.8 |
| ROA | 5.6 |
| Gross margin | 9.6 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 4.1 |
| FCF quality | 4.6 |
| Moat | 7.6 |
| Rule of 40 | 3.0 |
| Piotroski F | 7.8 |
- ▸Excellent ROE: 26%
- ▸Strong margins: 22%
- ▸Earnings quality warning: 59% FCF/NI
- ▸Wide economic moat
Growth
2.5/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 5.0 |
| EPS growth | 0.0 |
Momentum
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 10.0 |
| OBV | 1.0 |
| MA position | 4.0 |
| Volume | 8.7 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
7.4/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 7.9 |
| Analyst rating | 7.5 |
| Price target | 6.8 |
- ▸LLM news sentiment: +0.57 (n=4)
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
4.8/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 1.9 |
| quality rank | 5.4 |
| growth rank | 6.9 |
Technical
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 5.8 |
| support resistance | 5.9 |
| 52w position | 8.0 |
Risk (lower is worse)
8.3/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.5 |
| days to cover | 7.8 |
| volatility | 7.8 |
| put call | 10.0 |
| implied vol | 8.2 |
| beta | 10.0 |
| debt equity | 6.9 |
| news risk | 6.0 |
Catalyst
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 5.6 |
| earnings timing | 5.0 |
| surprise avg | 2.3 |
| dividend safety | 4.2 |
| news activity | 8.0 |
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- MOMENTUM:5.8>=5.5
- INSIDER:OK
- 8K:CLEAN
- EARNINGS_PROXIMITY:47d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:0.2<1.5@spot
Warning (0)
none
Reward-to-Risk
0.21
Upside
+1.0%
Downside
5.0%
Sizing output
AVOID
SetupRANGE_BOUND — RSI 58 mid-range, Bollinger mid-band
EdgeNO_EDGE — No clear edge identified
SuitabilityMODERATE — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 5.4 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Risk (lower is worse) at 8.3) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:0.2<1.5@spot) reinforce the read. Current asymmetry R:R is 0.21 — supplementary context, not the trigger for this path.
The strongest dimensions are Risk (lower is worse) at 8.3, Sentiment at 7.4, and Quality at 7.1; the weakest are Growth at 2.5, Peer rank at 4.8, and Value at 4.9. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of 0.21 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Quality subscore of 7.1 with ROE 26%, margins 22%, wide economic moat (moat=7.6), and 'Compounder quality' note earns the V7 quality-resilience bonus of +0.2 in RISK_OFF regimes.
Trip ifQuality subscore falls below 6.0 or moat component drops below 6.0.
- P2Sector modifier (Healthcare): +0.5 (bull_case[1]) provides a structural defensive premium during RISK_OFF regimes.
Trip ifHealthcare sector modifier falls below 0 on the next refresh.
- P3V9 setup_type=BREAKOUT with rationale 'Golden cross, above all MAs, RSI 68, MACD bullish' plus momentum subscore 7.1 and rising OBV (volume accumulation) confirm institutional buying.
Trip ifPrice closes below 200-day MA or MACD component drops below 5.0.
- P4Bear_case flags 'Weak growth' with growth subscore 2.5, earnings_growth component 0.0/10, and PEG 3.05 — the engine cannot find a growth path.
Trip ifGrowth subscore stays below 3.0 for 2 consecutive refreshes.
- P5V9 ASYMMETRY:-0.4=NEGATIVE with current_price $233 above take_profit $229.47, V8 explicitly flags 'Target reached (-2.3% upside)' — no reward setup remains at spot.
Trip ifV9 asymmetry_ratio stays below 0 for 3 consecutive refreshes.