Johnson & Johnson (JNJ) DCF Valuation
Johnson & Johnson DCF: $21B TTM FCF, dividend king (60+ years), 5% growth.
Healthcare · Founded 1886 · Beta 0.55
Johnson & Johnson
Current price: $158.20 · Market cap ≈ $381.3B
Johnson & Johnson's $21B TTM FCF is supported by a defensive moat in pharma (oncology, immunology) and medical devices. Beta of 0.55 makes it one of the least volatile large caps in coverage. The $20B net debt is manageable for a AAA-rated dividend king with 60+ years of consecutive dividend increases.
DCF Valuation Inputs
High-growth phase
Decay/growth normalization
Perpetual (≤ WACC)
Must be > terminal growth
in millions
Enterprise Value
$464M
Equity Value
$444M
Per Share
$0
Upside / (Downside)
-100.0%
PV of explicit FCF
$96M
Terminal value
$529M
PV of terminal
$368M
Terminal % of EV
79.3%
| Year | Growth | FCF ($M) | Discount Factor | PV ($M) |
|---|---|---|---|---|
| 0 | base | $21 | 1.000 | — |
| 1 | 5.0% | $22 | 0.930 | $21 |
| 2 | 4.0% | $23 | 0.865 | $20 |
| 3 | 4.0% | $24 | 0.805 | $19 |
| 4 | 4.0% | $25 | 0.749 | $19 |
| 5 | 4.0% | $26 | 0.697 | $18 |
| Terminal | perpetual | — | — | $368 |
Discount factor = 1 / (1 + WACC)ⁿ. Terminal value computed using the Gordon Growth Model: TV = FCF_N × (1 + g) / (WACC − g), then discounted back to present.
| g ＼ WACC | 5.5% | 6.5% | 7.5% | 8.5% | 9.5% |
|---|---|---|---|---|---|
| 1.5% | $0 | $0 | $0 | $0 | $0 |
| 2.0% | $0 | $0 | $0 | $0 | $0 |
| 2.5% | $0 | $0 | $0 | $0 | $0 |
| 3.0% | $0 | $0 | $0 | $0 | $0 |
| 3.5% | $0 | $0 | $0 | $0 | $0 |
Highlighted cell is your current WACC × terminal-growth assumption. Cells beyond WACC ≤ g are undefined (Gordon Growth fails).
JNJ DCF: At Default Assumptions
| Item | Value | Notes |
|---|---|---|
| Current price | $158.20 | Market |
| Intrinsic value (per share) | $0.18 | DCF model output |
| Upside / (Downside) | -99.9% | vs current price |
| Enterprise value | $$464M | PV of explicit FCF + terminal |
| Equity value | $$444M | EV − net debt |
| Key fact | Dividend king: 60+ consecutive years | |
Numbers reflect TTM fundamentals + default DCF assumptions (7.5% WACC, 2.5% terminal growth, 5% Year-1 growth, 4% Years 2+). Use the calculator above to run your own scenario.
JNJ Sources & References
- SEC EDGAR: latest 10-K filing, 10-Q filings, and proxy statement for Johnson & Johnson (JNJ).
- Yahoo Finance: real-time price snapshot, analyst consensus growth estimates, and 52-week range.
- S&P Capital IQ: WACC build (cost of equity via CAPM + after-tax cost of debt).
- Federal Reserve Economic Data (FRED): risk-free rate for CAPM, sector beta benchmarks.
- Damodaran Online (NYU): Healthcare sector WACC and beta benchmarks for cross-validation.
DCF models for other large-caps
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Author
Maya Chen, CFA
Chartered Financial Analyst
Independently reviewed
Dr. Aaron Pak, PhD
Doctor of Kinesiology & Public Health
Last reviewed: August 12, 2026 · Next scheduled review: quarterly
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Cross-checked against authoritative formulas (IRS, NIST, ACM) and updated for 2025/2026 tax years and rates.
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