MeritValue

JOHNSON & JOHNSON

JNJdata completeness 100%19 fiscal years on file
The thesis, from the filings

JOHNSON & JOHNSON earns about 13% on invested capital, comfortably above its ~9% cost of capital, and has bought back 9% of its shares over 5 years — the marks of a durable business run for its owners. The estimate methods put fair value between $74.13 and $89.06 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2022FY 2023FY 2023FY 2024FY 2025
Revenue$78.7B1$80B2$85.2B3$88.8B3$94.2B3
Net income$20.9B4$17.9B5$35.2B6$14.1B6$26.8B6
Operating cash flow$23.4B7$21.2B8$22.8B9$24.3B9$24.5B9
Capital expenditure$3.65B10$4.01B11$4.54B12$4.42B12$4.83B12
Free cash flow (derived)$19.8B7$17.2B8$18.2B9$19.8B9$19.7B9
Total debt$71.8B13$82.4B14$61.7B15$76.8B16$99.9B16
Cash & equivalents$14.5B17$12.9B18$21.9B19$24.1B20$19.7B20
Diluted shares2.67B2.66B2.56B2.43B2.43B

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$335.65
your share of equity
Profit it earned you last year
$110.33
Free cash flow it threw off
$81.08
Debt you’d be carrying
$411.09

10 shares is a claim on $335.65 of net worth that earned you $110.33 and generated $81.08 of cash last year, against $411.09 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
13% avg · 5y
FY22 14%FY23 11%FY23 13%FY24 11%FY25 17%

It earned about 13% on invested capital against a ~9% cost of capital — comfortably above the cost of funding, a moderate advantage.

seeing a moat in the numbers →
Management signal · capital allocation
−9% shares · 5y

Share count is down 9% over 5 years — management has been buying back stock, quietly handing owners a bigger slice. Total debt has risen 39% over the same window.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 3 estimate methods that apply put fair value between $74.13 and $89.06 a share. They rest on different assumptions, so where they diverge is the story; the Graham Number is a stricter floor, not a target.

DCF · Growth Exit 10Y
$74.13
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth0.0%
  • fcfBase$19.7B
DCF · Growth Exit 5Y
$82.85
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth0.0%
  • fcfBase$19.7B
Earnings Power Value
$89.06
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$20.9B
  • growthAssumed0.0%
Graham Number
$91.27
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years0.0%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $82.85
The three cases
Bear0.0%$82.85
Base0.0%$82.85
Bull5.0%$110.89

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 0.0%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2022-01-02 · accession 0000200406-24-000013 (RevenueFromContractWithCustomerExcludingAssessedTax)
  2. 10-K · period ending 2023-01-01 · accession 0000200406-25-000038 (RevenueFromContractWithCustomerExcludingAssessedTax)
  3. 10-K · period ending 2023-12-31 · accession 0000200406-26-000016 (RevenueFromContractWithCustomerExcludingAssessedTax)
  4. 10-K · period ending 2022-01-02 · accession 0000200406-24-000013 (NetIncomeLoss)
  5. 10-K · period ending 2023-01-01 · accession 0000200406-25-000038 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0000200406-26-000016 (NetIncomeLoss)
  7. 10-K · period ending 2022-01-02 · accession 0000200406-24-000013 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2023-01-01 · accession 0000200406-25-000038 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0000200406-26-000016 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2022-01-02 · accession 0000200406-24-000013 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2023-01-01 · accession 0000200406-25-000038 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-12-31 · accession 0000200406-26-000016 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2022-01-02 · accession 0000200406-23-000016 (LongTermDebtNoncurrent)
  14. 10-K · period ending 2023-01-01 · accession 0000200406-24-000013 (LongTermDebtNoncurrent)
  15. 10-K · period ending 2023-12-31 · accession 0000200406-25-000038 (LongTermDebtNoncurrent)
  16. 10-K · period ending 2024-12-29 · accession 0000200406-26-000016 (LongTermDebtNoncurrent)
  17. 10-K · period ending 2022-01-02 · accession 0000200406-23-000016 (CashAndCashEquivalentsAtCarryingValue)
  18. 10-K · period ending 2023-01-01 · accession 0000200406-24-000013 (CashAndCashEquivalentsAtCarryingValue)
  19. 10-K · period ending 2023-12-31 · accession 0000200406-25-000038 (CashAndCashEquivalentsAtCarryingValue)
  20. 10-K · period ending 2024-12-29 · accession 0000200406-26-000016 (CashAndCashEquivalentsAtCarryingValue)