Johnson & Johnson

Analyst Listing

The following analysts provide coverage for the subject firm as of May 2016:

Broker Analyst Analyst Email
Morningstar Damien Conover damien.conover@morningstar.com
BTIG Dane Leone dleone@btig.com
Leerink Partners Danielle Antalffy danielle.antalffy@leerink.com
Argus Research David Toung dtoung@argusresearch.com
Societe Generale Florent Cespedes florent.cespedes@sgcib.com
RBC Capital Markets Glenn Novarro glenn.novarro@rbccm.com
Raymond James Jayson Bedford jayson.bedford@raymondjames.com
Jefferies Jeffrey Holford jholford@jefferies.com
BMO Capital Markets Joanne K. Wuensch joanne.wuensch@bmo.com
Cowen & Company Joshua Jennings josh.jennings@cowen.com
Deutsche Bank Research Kristen Stewart kristen.stewart@db.com
Wells Fargo Securities Larry Biegelsen lawrence.biegelsen@wellsfargo.com
Piper Jaffray Richard J. Purkiss richard.j.purkiss@pjc.com
Stifel Nicolaus Rick Wise danielle.antalffy@leerink.com
Erste Group Stephan Lingnau stephan.lingnau@erstegroup.com
Atlantic Equities Steve Chesney s.chesney@atlantic-equities.com
Guggenheim Securities Tony Butler tony.butler@guggenheimpartners.com
Credit Suisse Vamil Divan vamil.divan@credit-suisse.com

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Primary Input Data

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Derived Input Data

Derived Input

Label

2015 Value

2016
Value

Equational Form

Net Operating Profit Less Adjusted Taxes NOPLAT  11,939 13,878 NOPLAT\, =\, EBIT\, x\, (1 \,-\, Avg \,\,Tax\,\, Rate\,\, on\,\, EBIT)
Free Cash Flow FCF 15,816 15,541 FCF\,=NOPLAT\,+\,Non-Cash\,Expenses-\Delta NWC\,-\,NCS
Tax Shield TS 109 23 TS\,=\,Interest\,\,Paid\,\,x\,\, Avg \,\,Tax\,\,Rate\,\, on\,\, Pre-Tax\,\, Income
Invested Capital IC  105,664 114,921 IC\,=\,Fixed\,\,Operating\,\,Assets\,\,+\,\,Net\,\, Working\,\, Capital
Return on Invested Capital ROIC 11.30% 12.08% ROIC\,=\,\frac { NOPLAT }{ IC }
Net Investment NetInv 3,376  13,011 NetInv\,=\,{ {IC}_{1}}-{{IC}_{0}}+Depreciation
Investment Rate IR 28.28% 93.76% IR\,=\,\frac {NetInv}{NOPLAT}
Weighted Average Cost of Capital
WACCMarket  13.63% 10.71% WACC\,=\,\frac { E }{ V } { R }_{ E }\,+\,\frac { P }{ V } { R }_{ P }\,+\,\frac { D }{ V } { R }_{ D }\left( 1- Avg\,\, Tax\,\,Rate\,\,on\,\,Pre-Tax\,\,Income \right)
 WACCBook   8.01%   7.10%
Enterprise value
EVMarket  260,761 294,229 EV\,=\,Market\,\,Cap\,\,Equity\,+\,\,Long\,\,Term\,\,Debt\,-\,Cash
 EVBook  253,960  292,352
Long-Run Growth
g = IR x ROIC
  3.20%  11.32% Long-run growth rates of the income variable are used in the Continuing Value portion of the valuation models.
g = % \Delta GDP   2.50%   2.50%
Margin from Operations M   26.17%  29.68% M\,\,=\,\,\frac{EBIT}{SALES}
Depreciation/Amortization Rate D   16.94%  14.95% D\,\,=\,\,\frac{D+A}{EBITDA}

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Valuation Multiple Outcomes

The outcomes presented in this study are the result of original input data, derived data, and synthesized inputs.

Equational Form

Observed Value

Single-stage

multiple g solution

Two-stage valuation

model g solution

12/31/2015 12/31/2016 12/31/2015 12/31/2016 12/31/2015 12/31/2016

EV/SALES 

\frac {EV}{Sales} \,= \,\frac{ROIC\,  -\,  g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)\,(M)

 3.71  4.09  15.22%  9.84%  14.59%  10.30%

EV/EBITDA

\frac {EV}{EBITDA} \,= \,\frac{ROIC\,  -\,  g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)\,(1\,-\,D)

11.79 11.72 15.22%  9.84% 14.59% 10.30%

EV/NOPLAT

\frac {EV}{NOPLAT} \,= \,\frac{ROIC\,  -\,  g}{ROIC\,(WACC\,-\,g)}

21.84 21.20 15.22% 9.84% 14.59% 10.30%

EV/FCFOPS

\frac {EV}{FCF_{OPS}} \,= \,\frac{ROIC\,  -\,  g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)

16.49 18.93 15.22% 9.84% 14.59% 10.30%

EV/EBIT

\frac {EV}{EBIT} \,= \,\frac{ROIC\,  -\,  g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)

14.20 13.78 15.22% 9.84% 14.59% 10.30%

EV/IC

\frac {EV}{IC} \,= \,\frac{ROIC\,  -\,  g}{WACC\,-\,g}

2.47 2.56 15.22% 9.84% 14.59% 10.30%

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