DCF Studio

    JNJ · NYQ · Healthcare

    Johnson & Johnson

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 217.65

    Market price

    USD 270.56

    Implied upside

    -19.6%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    Current EV/EBITDA of 20.5x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    USD 217.65-19.6%
    Exit multiple
    USD 295.12+9.1%
    Market price
    USD 270.56

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn14bn27bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 101.2bnUSD 107.7bnUSD 114.2bnUSD 120.4bnUSD 126.4bnUSD 132.0bnUSD 137.3bnUSD 142.1bnUSD 146.3bnUSD 150.0bn+4.5%
    EBITUSD 26.1bnUSD 27.8bnUSD 29.5bnUSD 31.1bnUSD 32.6bnUSD 34.1bnUSD 35.4bnUSD 36.7bnUSD 37.8bnUSD 38.7bn+4.5%
    NOPATUSD 22.1bnUSD 23.5bnUSD 24.9bnUSD 26.2bnUSD 27.5bnUSD 28.8bnUSD 29.9bnUSD 31.0bnUSD 31.9bnUSD 32.7bn+4.5%
    Add depreciation & amortisationUSD 8.5bnUSD 9.1bnUSD 9.6bnUSD 10.2bnUSD 10.7bnUSD 11.1bnUSD 11.6bnUSD 12.0bnUSD 12.3bnUSD 12.6bn+4.5%
    Less capital expenditureUSD -5.9bnUSD -7.0bnUSD -8.2bnUSD -9.4bnUSD -10.7bnUSD -12.0bnUSD -13.4bnUSD -14.8bnUSD -16.2bnUSD -17.6bn+12.8%
    Capex, % of revenue5.9%6.5%7.2%7.8%8.5%9.1%9.8%10.4%11.1%11.7%-
    Less increase in working capitalUSD -1.3bnUSD -1.3bnUSD -1.2bnUSD -1.2bnUSD -1.1bnUSD -1.1bnUSD -1.0bnUSD -919.1mUSD -816.5mUSD -702.3m-7.0%
    Free cashflow to firmUSD 23.3bnUSD 24.3bnUSD 25.1bnUSD 25.8bnUSD 26.4bnUSD 26.8bnUSD 27.1bnUSD 27.2bnUSD 27.2bnUSD 27.1bn+1.7%
    Discount factor0.96810.90740.85050.79710.74710.70020.65630.61510.57660.5404-
    Present valueUSD 22.6bnUSD 22.0bnUSD 21.3bnUSD 20.6bnUSD 19.7bnUSD 18.8bnUSD 17.8bnUSD 16.7bnUSD 15.7bnUSD 14.6bn-
    Present Value Of The ForecastUSD 189.8bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.464Reported 0.200, pulled toward 1.0 (Blume)
    Cost of equity6.86%Risk-free + beta x equity risk premium
    Cost of debt5.29%Risk-free + 40bp, the spread for a AAA rating at 26.4x interest cover. Book interest / average debt was lower, at 2.3%.
    Market capitalisationUSD 651.3bn93.1% of capital
    Total debtUSD 47.9bn6.9% of capital, book value as a proxy
    Tax rate15.6%Effective, capped at statutory
    WACC6.69%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 217.65

    66% of EV

    Forecast FCFF, final year
    USD 27.1bn
    Capex at depreciation, working capital in reinvestment
    USD 32.7bn
    Less reinvestment at g/ROIC (15.0% of NOPAT)
    USD -4.9bn
    Capitalised
    USD 27.8bn
    ROIC (reported)
    16.6%
    Terminal value, undiscounted
    USD 678.7bn
    Terminal value, discounted
    USD 366.8bn
    Enterprise value
    USD 556.6bn
    Less net debt
    USD 27.8bn
    Equity value
    USD 528.8bn

    Exit at 20.0x EBITDA

    Value per shareUSD 295.12

    75% of EV

    Terminal value, undiscounted
    USD 1027.0bn
    Terminal value, discounted
    USD 555.0bn
    Enterprise value
    USD 744.8bn
    Less net debt
    USD 27.8bn
    Equity value
    USD 717.0bn

    Spread between methods: 30%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    4.69%328.22365.15419.42506.38667.15
    5.69%247.76264.57286.98318.08363.84
    6.69%198.30206.84217.65231.64250.32
    7.69%164.83169.38174.97181.96190.82
    8.69%140.68143.10146.05149.66154.14

    Outlined: this model. Green text: above today's price of 270.56. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year5.6%4.8%7.3%
    EBIT margin27.2%25.8%31.8%
    Discount rate-6.7%5.9%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.