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	WACC_Market	13.63%	10.71%	$WACC\,=\,\frac { E }{ V } { R }_{ E }\,+\,\frac { P }{ V } { R }_{ P }\,+\,\frac { D }{ V } { R }_{ D }\left( 1- Avg\,\, Tax\,\,Rate\,\,on\,\,Pre-Tax\,\,Income \right)$
Weighted Average Cost of Capital	WACC_Book	8.01%	7.10%
Enterprise value	EV_Market	260,761	294,229	$EV\,=\,Market\,\,Cap\,\,Equity\,+\,\,Long\,\,Term\,\,Debt\,-\,Cash$
Enterprise value	EV_Book	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.
Long-Run Growth	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
Equational Form	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/FCF_OPS $\frac {EV}{FCF_{OPS}} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)$	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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