I've discussed Johnson & Johnson's (NYSE:JNJ) various businesses from a qualitative and quantitative prospective, and it’s clear that I like the company’s long-term strategy and its pharma pipeline.
I believe Johnson & Johnson is one of the best positioned companies in the pharmaceuticals space and worthy of long-term investment. However, I think some profit taking on the name would make sense at this time.
In fact, after the strong performance in the last two months and a 19% move up year-to-date, a valuation check suggests that the risk/reward is much less compelling than few months ago.
Thus, in this article, I will go through three valuation approaches — DCF, sum-of-the-parts (SOTP), and multiple comparison — to demonstrate why I believe it’s time to take profits in Johnson & Johnson.
