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    Johnson & Johnson (JNJ) Stock May Be A Bargain Following New TREMFYA Trial Data

    Simply Wall St·10/13/2026 08:24:07
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    Johnson & Johnson has delivered a powerful run for shareholders over the past few years, which puts a sharper spotlight on whether today's valuation is properly backed by its cash flows. With fresh drug data, pipeline headlines and legal disputes all in play, the question now is how much of that story is already reflected in the current price.

    • Over the past 5 years, Johnson & Johnson has returned 89.4%, which raises the stakes on whether the current share price is still in line with what its cash flows can support.
    • Recent trial results for TREMFYA and other late stage therapies can influence expectations for future cash generation, especially as the pharmaceutical unit faces upcoming patent expirations on existing blockbusters that may pressure revenue streams later this decade.
    • Prefer to judge Johnson & Johnson on earnings? See why Johnson & Johnson's 30.2x P/E tells a different valuation story.

    For investors, the debate is whether Johnson & Johnson's recent share price strength is adequately supported by the cash flows implied by its Discounted Cash Flow (DCF) intrinsic value estimate.

    If you want to stress test this same cash flow question beyond Johnson & Johnson, scan a wider field of 29 high quality undervalued stocks.

    Does Johnson & Johnson Look Undervalued on Cash Flow?

    The Discounted Cash Flow (DCF) model values Johnson & Johnson by projecting the cash it can return to shareholders and then discounting those streams back to today. Over the last twelve months the group generated roughly $21.7b of free cash flow, and the forecast set used here points to growing cash generation over the next decade rather than a shrinking profile.

    Those projections help explain why the DCF output puts Johnson & Johnson's estimated intrinsic value meaningfully above the current share price of $263.73. Patent expiries around 2027 and 2028 for drugs like Imbruvica and Darzalex are incorporated in the two stage Free Cash Flow to Equity model, so the gap reflects an assumption that the existing pipeline and future launches can sustain cash flows beyond that hump. The fresh Phase 3 data for TREMFYA in Crohn's disease reinforces that picture of ongoing product depth, even if the market is not fully crediting those longer term cash streams at today's quote. Find out what Johnson & Johnson could be worth using our Discounted Cash Flow (DCF) estimate.

    The Johnson & Johnson Narrative: What Would Justify Today's Price?

    Simply Wall St Narratives pick up where the valuation puzzle for Johnson & Johnson leaves off by spelling out which paths for growth, profitability and earnings would need to play out for the stock to be worth materially more or materially less than today's level on the Community page. Rather than a single multiple or model output, each one lays out the key drivers behind its fair value view so you can compare those assumptions with future reported results.

    Community views on Johnson & Johnson split between those who see more upside in the new drug and MedTech cycle and those who think the current price already reflects much of that story.

    Bull case: roughly fairly valued

    "The company's substantial investment of over $55 billion into manufacturing, R&D, and technology in the U.S. over the next four years is projected to expand capacity for advanced medicines and devices, potentially increasing operational efficiency and future earnings…"

    Discover why this Narrative puts Johnson & Johnson at roughly fairly valued.

    Bear case: 7% overvalued

    "At approximately 22 times earnings, JNJ trades near sector averages but commands a modest premium for stability, balance sheet strength, and consistent free cash flow…"

    Explore why this Narrative puts Johnson & Johnson at 7% overvalued.

    One more Johnson & Johnson factor to check before you move on

    Cash flows and trial headlines only tell part of the story for Johnson & Johnson, because the people steering the business and how they are rewarded can shape every capital allocation decision that follows. See who runs Johnson & Johnson and how they are paid.

    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.