Johnson & Johnson - Revision history

>Claudiatorres: /* Risks */

2023-09-06T20:50:53Z

Risks

← Older revision		Revision as of 21:50, 6 September 2023
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	Here, to estimate the adjusted beta, we used the iShares MSCI World ETF to represent the market portfolio; and in terms of the time period and frequency of observations, we used five years of monthly data (i.e. 60 observations in total), which is supported by a study and is the most common choice. The beta value in a future period has been found to be on average closer to the mean value of 1.0, and because valuation is forward-looking, it is logical to adjust the raw beta so it more/most accurately predicts a future beta. In addition, here, we have assumed that for an investment to be considered 'medium' risk, it must have a beta value of between 0.5 and 1.5. Further information about the beta ratings can be found in the appendix section of this report.		Here, to estimate the adjusted beta, we used the iShares MSCI World ETF to represent the market portfolio; and in terms of the time period and frequency of observations, we used five years of monthly data (i.e. 60 observations in total), which is supported by a study and is the most common choice. The beta value in a future period has been found to be on average closer to the mean value of 1.0, and because valuation is forward-looking, it is logical to adjust the raw beta so it more/most accurately predicts a future beta. In addition, here, we have assumed that for an investment to be considered 'medium' risk, it must have a beta value of between 0.5 and 1.5. Further information about the beta ratings can be found in the appendix section of this report.

			==== Risks that Johnson & Johnson is exposed to: ====
			Risks Related to Our Business, Industry and Operations:

			* The Company’s businesses operate in highly competitive product markets and competitive pressures could adversely affect the Company’s earnings.
			* Interruptions and delays in manufacturing operations could adversely affect the Company’s business, sales and reputation
			* The Company relies on third parties to manufacture certain of our products. Any failure by or loss of a third party manufacturer could result in delays and increased costs, which may adversely affect our business.
			* Counterfeit versions of our products could harm our patients and have a negative impact on our revenues, earnings, reputation and business.
			* Global health crises, pandemics, epidemics, or other outbreaks could adversely disrupt or impact certain aspects of the Company’s business, results of operations and financial condition

			Risks Related to Government Regulation and Legal Proceedings:

			* Global sales in the Company’s Pharmaceutical and MedTech segments may be negatively impacted by healthcare reforms and increasing pricing pressures
			* The Company is subject to significant legal proceedings that can result in significant expenses, fines and reputational damage.
			* The Company faces significant regulatory scrutiny, which imposes significant compliance costs and exposes the Company to government investigations, legal actions and penalties
			* Changes in tax laws or exposures to additional tax liabilities could negatively impact the Company’s operating results.

			Risks Related to Our Intellectual Property

			* The Company faces increased challenges to intellectual property rights central to its business.

			Risks Related to Product Development, Regulatory Approval and Commercialization

			* Significant challenges or delays in the Company’s innovation and development of new products, technologies and indications could have an adverse impact on the Company’s long-term success

			Risks Related to Financial and Economic Market Conditions:

			* The Company faces a variety of financial, economic, legal, social and political risks associated with conducting business internationally.
			* Failure to maintain a satisfactory credit rating could adversely affect our liquidity, capital position, borrowing costs and access to capital markets
			* The Russia-Ukraine War, and actions taken in response to the Russia-Ukraine War, could adversely affect our business, results of operations or financial condition.

	== Financials ==		== Financials ==

95.149.161.160: /* Income Statement */

2023-09-06T10:10:40Z

Income Statement

← Older revision		Revision as of 11:10, 6 September 2023
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	=== Income Statement ===		=== Income Statement ===
	{\| class="wikitable"		{\| class="wikitable"
	~~\|'''JNJ'''~~
	~~\|'''Johnson & Johnson'''~~
	\|
	~~\|'''FY0'''~~
	~~\|'''FY1'''~~
	~~\|'''FY2'''~~
	~~\|'''FY3'''~~
	~~\|'''FY4'''~~
	~~\|'''FY5'''~~
	\|-		\|-
	\|'''USDm'''		!'''USDm'''
	\|'''2020'''		!'''2020'''
	\|'''2021'''		!'''2021'''
	\|'''2022'''		!'''2022'''
	\|'''2023E'''		!'''2023E'''
	\|'''2024E'''		!'''2024E'''
	\|'''2025E'''		!'''2025E'''
	\|'''2026E'''		!'''2026E'''
	\|'''2027E'''		!'''2027E'''
	\|-
	\|
	\|
	\|
	\|
	\|
	\|
	\|
	\|
	\|
	\|-		\|-
	\|Assumptions:		\|Assumptions:
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	=== Cash Flow ===		=== Cash Flow ===
	{\| class="wikitable"		{\| class="wikitable"
	~~\|'''JNJ'''~~
	~~\|'''Johnson & Johnson'''~~
	\|
	~~\|'''FY0'''~~
	~~\|'''FY1'''~~
	~~\|'''FY2'''~~
	~~\|'''FY3'''~~
	~~\|'''FY4'''~~
	~~\|'''FY5'''~~
	\|-		\|-
	\|'''USDm'''		!'''USDm'''
	\|2020		!2020
	\|2021		!2021
	\|2022		!2022
	\|2023E		!2023E
	\|2024E		!2024E
	\|2025E		!2025E
	\|2026E		!2026E
	\|2027E		!2027E
	\|-		\|-
	\|'''Assumptions'''		\|'''Assumptions'''
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	=== Balance Sheet ===		=== Balance Sheet ===
	{\| class="wikitable"		{\| class="wikitable"
	~~\|'''JNJ'''~~
	~~\|'''Johnson & Johnson'''~~
	\|
	~~\|'''FY0'''~~
	~~\|'''FY1'''~~
	~~\|'''FY2'''~~
	~~\|'''FY3'''~~
	~~\|'''FY4'''~~
	~~\|'''FY5'''~~
	\|-		\|-
	\|'''USDm'''		!'''USDm'''
	\|2020		!2020
	\|2021		!2021
	\|2022		!2022
	\|2023E		!2023E
	\|2024E		!2024E
	\|2025E		!2025E
	\|2026E		!2026E
	\|2027E		!2027E
	\|-
	\|
	\|
	\|
	\|
	\|
	\|
	\|
	\|
	\|
	\|-		\|-
	\|'''Cash and Short Term Investments'''		\|'''Cash and Short Term Investments'''

>Claudiatorres: /* Financials */

2023-09-05T22:30:55Z

Financials

Show changes

95.149.161.160: /* What's the expected return of an investment in the company? */

2023-09-04T10:11:27Z

What's the expected return of an investment in the company?

← Older revision		Revision as of 11:11, 4 September 2023
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	The Stockhub users estimate that the expected return of an investment in the company over the next five years is negative 22.83%, which equates to an annual return of negative 4.96%. In other words, an £1,000 investment in the company is expected to return £774 in five years time. The assumptions used to estimate the return figure can be found in the table below.		The Stockhub users estimate that the expected return of an investment in the company over the next five years is negative 22.83%, which equates to an annual return of negative 4.96%. In other words, an £1,000 investment in the company is expected to return £774 in five years time. The assumptions used to estimate the return figure can be found in the table below.

	Assuming that a suitable return level over five years is negative 4.96% per year or ~~more~~, and Johnson & Johnson achieves its expected return level (of negative 4.96%), then an investment in the company is considered to be an 'suitable' one.		Assuming that a suitable return level over five years is negative 4.96% per year or less, and Johnson & Johnson achieves its expected return level (of negative 4.96%), then an investment in the company is considered to be an 'suitable' one.

	==== What are the assumptions used to estimate the return? ====		==== What are the assumptions used to estimate the return? ====

95.149.161.160: /* What's the expected return of an investment in the company? */

2023-09-04T10:09:38Z

What's the expected return of an investment in the company?

← Older revision		Revision as of 11:09, 4 September 2023
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	==== What's the expected return of an investment in the company? ====		==== What's the expected return of an investment in the company? ====
	The Stockhub users estimate that the expected return of an investment in the company over the next five years is negative 22.83%, which equates to an annual return of negative 72.63%. In other words, an £1,000 investment in the company is expected to return ~~£ccc~~ in five years time. The assumptions used to estimate the return figure can be found in the table below.		The Stockhub users estimate that the expected return of an investment in the company over the next five years is negative 22.83%, which equates to an annual return of negative 4.96%. In other words, an £1,000 investment in the company is expected to return £774 in five years time. The assumptions used to estimate the return figure can be found in the table below.

	Assuming that a suitable return level over five years is ~~ccc~~% per year or ~~less~~, and Johnson & Johnson achieves its expected return level (of ~~ccc~~%), then an investment in the company is considered to be an 'suitable' one.		Assuming that a suitable return level over five years is negative 4.96% per year or more, and Johnson & Johnson achieves its expected return level (of negative 4.96%), then an investment in the company is considered to be an 'suitable' one.

	==== What are the assumptions used to estimate the return? ====		==== What are the assumptions used to estimate the return? ====

Manos: /* Risks */

2023-09-03T21:32:23Z

Risks

← Older revision		Revision as of 22:32, 3 September 2023
Line 302:		Line 302:

	Here, to estimate the adjusted beta, we used the iShares MSCI World ETF to represent the market portfolio; and in terms of the time period and frequency of observations, we used five years of monthly data (i.e. 60 observations in total), which is supported by a study and is the most common choice. The beta value in a future period has been found to be on average closer to the mean value of 1.0, and because valuation is forward-looking, it is logical to adjust the raw beta so it more/most accurately predicts a future beta. In addition, here, we have assumed that for an investment to be considered 'medium' risk, it must have a beta value of between 0.5 and 1.5. Further information about the beta ratings can be found in the appendix section of this report.		Here, to estimate the adjusted beta, we used the iShares MSCI World ETF to represent the market portfolio; and in terms of the time period and frequency of observations, we used five years of monthly data (i.e. 60 observations in total), which is supported by a study and is the most common choice. The beta value in a future period has been found to be on average closer to the mean value of 1.0, and because valuation is forward-looking, it is logical to adjust the raw beta so it more/most accurately predicts a future beta. In addition, here, we have assumed that for an investment to be considered 'medium' risk, it must have a beta value of between 0.5 and 1.5. Further information about the beta ratings can be found in the appendix section of this report.

			== Financials ==
			ccc
	== Valuation ==		== Valuation ==

Manos at 21:31, 3 September 2023

2023-09-03T21:31:12Z

← Older revision		Revision as of 22:31, 3 September 2023
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	\|}		\|}

			== Appendix ==

	{\| class="wikitable"		{\| class="wikitable"
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	\|Cost of equity = Risk-free rate + Beta x Equity risk premium.		\|Cost of equity = Risk-free rate + Beta x Equity risk premium.
	\|}		\|}

	~~== Appendix ==~~

	=== Johnson & Johnson dividends ===		=== Johnson & Johnson dividends ===

Manos: /* What are the assumptions used to estimate the return? */

2023-09-03T21:30:29Z

What are the assumptions used to estimate the return?

← Older revision		Revision as of 22:30, 3 September 2023
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	==== What's the expected return of an investment in the company? ====		==== What's the expected return of an investment in the company? ====
	The Stockhub users estimate that the expected return of an investment in the company over the next five years is ~~ccc~~%, which equates to an annual return of ~~ccc~~%. In other words, an £1,000 investment in the company is expected to return £ccc in five years time. The assumptions used to estimate the return figure can be found in the table below.		The Stockhub users estimate that the expected return of an investment in the company over the next five years is negative 22.83%, which equates to an annual return of negative 72.63%. In other words, an £1,000 investment in the company is expected to return £ccc in five years time. The assumptions used to estimate the return figure can be found in the table below.

	Assuming that a suitable return level over five years is ccc% per year or less, and ~~Pantheon Resources~~ achieves its expected return level (of ccc%), then an investment in the company is considered to be an 'suitable' one.		Assuming that a suitable return level over five years is ccc% per year or less, and Johnson & Johnson achieves its expected return level (of ccc%), then an investment in the company is considered to be an 'suitable' one.

	==== What are the assumptions used to estimate the return? ====		==== What are the assumptions used to estimate the return? ====
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	\|Which type of discounted cash flow model do you want to use?		\|Which type of discounted cash flow model do you want to use?
	\|Dividend discount model		\|Dividend discount model
	\|The policy of Alpha FMC is to pay out approximately half of adjusted profit after tax. Accordingly, we suggest using the dividend discount model (DDM), which is one of the most common discounted cash flow models.		\|
	\|-		\|-
	\|How many distinct stage of growth do you want to use?		\|How many distinct stage of growth do you want to use?
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	The main inputs that result in the greatest change in the expected return of the Johnson & Johnson investment are, in order of importance (from highest to lowest):		The main inputs that result in the greatest change in the expected return of the Johnson & Johnson investment are, in order of importance (from highest to lowest):

	# The ~~size of the total addressable market~~ (the default ~~size~~ is ~~$ccc~~);		# The discount rate (the default rate is 9.98%).
	# ~~Johnson & Johnson peak market share~~ (the default ~~share~~ is ~~ccc~~%); and		# The initial growth rate (the default rate is 5.93%);
	# The ~~discount~~ rate (the default ~~time-weighted average~~ rate is ~~ccc~~%).		# The half life of the initial dividend growth rate (10 years); and
			# The terminal growth rate (the default rate is 3%).

	The impact of a 50% change in those main inputs to the expected return of the Johnson & Johnson investment is shown in the table below.		The impact of a 10% change in those main inputs to the expected return of the Johnson & Johnson investment is shown in the table below.
	{\| class="wikitable sortable"		{\| class="wikitable sortable"
	\|+Johnson & Johnson investment expected return sensitivity analysis		\|+Johnson & Johnson investment expected return sensitivity analysis
	!Main input		!Main input
	!50% worse		!10% worse
	!Unchanged		!Unchanged
	!50% better		!10% better
			\|-
			\|The default rate
			\|(32.48)%
			\|(22.83)%
			\|(9.95)%
	\|-		\|-
	\|The ~~discount~~ rate		\|The initial growth rate
	\|~~ccc~~%		\|(28.73)%
	\|~~ccc~~%		\|(22.83)%
	\|~~ccc~~%		\|(16.62)%
	\|-		\|-
	\|The ~~size~~ of the ~~total addressable market~~		\|The half life of the initial dividend growth rate
	\|~~ccc~~%		\|(24.54)%
	\|~~ccc~~%		\|(22.83)%
	\|~~ccc~~%		\|(21.12)%
	\|-		\|-
	\|~~Johnson & Johnson peak market share~~		\|The terminal growth rate
	\|~~ccc~~%		\|(24.50)%
	\|~~ccc~~%		\|(22.83)%
	\|~~ccc~~%		\|(21.01)%
	\|}		\|}

Manos: /* Appendix */

2023-09-03T21:14:10Z

Appendix

Show changes

Manos: /* Appendix */

2023-09-03T20:49:35Z

Appendix

← Older revision		Revision as of 21:49, 3 September 2023
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	\|+		\|+
	!		!
	~~!2017~~
	~~!2018~~
	!2019		!2019
	!2020		!2020
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	\|-		\|-
	\|Cash Flow from Operations		\|Cash Flow from Operations
	~~\| style="background: green; color: white;" \|+~~
	~~\| style="background: green; color: white;" \|+~~
	\| style="background: green; color: white;" \|+		\| style="background: green; color: white;" \|+
	\| style="background: green; color: white;" \|+		\| style="background: green; color: white;" \|+
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	\|-		\|-
	\|Cash Flow from Investing		\|Cash Flow from Investing
	~~\| style="background: red; color: white;" \|-~~
	~~\| style="background: red; color: white;" \|-~~
	\| style="background: red; color: white;" \|-		\| style="background: red; color: white;" \|-
	\| style="background: red; color: white;" \|-		\| style="background: red; color: white;" \|-
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	\|-		\|-
	\|Cash Flow from Financing		\|Cash Flow from Financing
	~~\| style="background: green; color: white;" \|+~~
	\| style="background: red; color: white;" \|-		\| style="background: red; color: white;" \|-
	\| style="background: red; color: white;" \|-		\| style="background: red; color: white;" \|-
	\| style="background: red; color: white;" \|-		\| style="background: red; color: white;" \|-
	\| style="background: red; color: white;" \|-		\| style="background: red; color: white;" \|-
	~~\| style="background: green; color: white;" \|+~~
	\|}		\|}