Johnson & Johnson (JNJ) stock (NYSE:JNJ) is down marginally after reporting a double-digit increase in third-quarter profits. J&J reported $2.55 earnings per share (EPS) on $23.79 billion in sales. This was more than the experts’ projection of $2.49 per share on $23.43 billion in sales. However, earnings per share were 1.9% lower than in the previous quarter.
Market Analysis of JNJ Stock
Owing to the company’s projection, JNJ stock (NYSE:JNJ) is down around 0.5% in late-day trade. The firm is also decreasing (i.e., tightening) its projection for the remainder of the year for the full year 2022. J&J anticipates EPS reaching a midpoint of $10.05 on $93.3 billion in sales. Analysts predicted $10.03 in profits per share and $94.85 billion in revenue.
The business attributed the narrower projection to a higher dollar, which reduced the value of its overseas sales.
To be honest, hitting the middle of J&J’s profits prediction would represent a 7% rise from 2021. That’s not bad at a time when an earnings slump is predicted. JNJ stock (NYSE:JNJ) is seen as a defensive choice that has historically performed well in downturn times. However, there is one factor that makes longer-term projections questionable.
JNJ Stock: Alpha and Beta must be balanced.
Investing, like other businesses, has its own lingo. Alpha and Beta are two often used words. Finding profit in the market is referred to as alpha. For obvious reasons, traders and investors want organizations with a track record of good (and rising) revenue and profitability. These stocks are in high demand because they are expected to beat the market.
Beta, on the other hand, is a measure of how a stock performs compared to the whole market. High-beta equities are thought to be more volatile than the market as a whole. This indicates that while the market is rising, these stocks also tend to rise. When the market falls, however, these stocks tend to fall faster than the overall market.
On the other hand, a low-beta stock has fewer extreme price movements. This implies it has greater highs during a bull market but lower lows during a bad market, which may assist investors in managing risk.
JNJ stock (NYSE:JNJ) is classified as a low-beta stock. Investors are debating whether the firm will generate enough income to be considered an investment in the current weak market.
Is JNJ Stock a Good Investment?
I’ll ramble a little bit about this. It’s not a no-brainer. Especially given that the firm is a Dividend King, having grown its dividend for the last 60 years. That is not something to overlook at a time when inflation is eroding our wealth.
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Author Okoro Chinedu 
