Should you buy Johnson & Johnson (JNJ)?
Updated
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.
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Engine methodology range
Range computation requires sufficient peer-comparable data; available for tickers with peer_count ≥3.
What the engine is tracking
| 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. | ||
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.
→stable- 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.
→stable- 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.
→stable- 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.
▸ Show 2 more pillars (SSR-indexed, visually truncated)▾ Show fewer
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.
→stable- 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.
→stable- 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.
→ Full pillar scorecard with all 5 pillars + per-dimension breakdown
When this thesis breaks
Falsifiable conditions per pillar — any one trip warrants review independent of price action. Engine-derived; not personalized advice.
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.
How the engine reached this verdict
TrendMatrix's engine output for Johnson & Johnson (JNJ) is SELL_IF_HOLDING with medium conviction, score 5.5/10 at $225.33. 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. Asymmetry R:R of 0.21 is supplementary context, not the trigger.
The engine's exit framework anchors to a tactical sell band near $225.33, with structural invalidation at $216.97. The asymmetric R:R against a reversal hypothesis is 0.27 — the upside scenario exists, but it requires multiple structural gates to flip; the downside scenario requires only one more disappointment. The engine's sizing output: 0.5% of portfolio at this asymmetry level (none-conviction tier).
On the bull side: High-quality business; Wide economic moat. On the bear side: Analyst target reached - limited upside remaining; Weak growth. Active engine warnings: V8: Target reached (1.0% upside), V9 Gate Failed: ASYMMETRY:0.2<1.5@spot.
The dominant failed gate is reward-to-risk at 0.2 vs threshold 1.5. SELL flips back toward HOLD if reward-to-risk recovers above its threshold AND a co-failing gate also clears. The strongest-cleared gate today is MOMENTUM:5.8>=5.5.
For the full 10-dimension breakdown + V9 gate detail: Why TrendMatrix rates JNJ — 10-dimension breakdown →
Bull case
- ▸High-quality business
- ▸Wide economic moat
Bear case
- ▸Analyst target reached - limited upside remaining
- ▸Weak growth