Mergers and Acquisitions
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JOHNSON & JOHNSON
Ronesha Gohagon
Davenport University
Dr. Dale Prondzinski
10-18-2021
Johnson & Johnson
Description of Johnson & Johnson (J&J) Company
J&J is a global firm created in 1886 aimed at developing pharmaceuticals, medical devices, and client packaged items. The company ranks no. 36 on the Fortune 500 list of America’s biggest companies by total returns. It is a valuable firm and is among the two firms in the U.S. having a prime credit rating of AAA. The corporation has operations in 60 nations and its goods are sold in more than 175 nations making international sales of $82.6 billion in 2020. J&J success in its Covid-19 vaccine plan can make the company stock valuation to increase significantly. J&J is worth $428.7 billion in market cap making it the largest pharmaceutical firm in the world.
Comparable Companies
Pfizer Inc. is an American global biotechnology and pharmaceutical firm established in 1849. The firm manufactures medicines and vaccines for diverse reasons such as cardiology and oncology. It has different products or drugs generating more than US $1 billion in annual returns. The company generated global sales of $41.9 billion in 2020. Pfizer Inc. has also developed Covid-19 vaccine administered throughout the nation.
Moderna, Inc. is the second comparable company. It is an American biotechnology and pharmaceutical firm based in Massachusetts. The company is younger compared to J&J and Pfizer. It has 24 vaccine candidate entailing HIV, Covid-19, influenza, and Nipah virus. Moderna, Inc makes 65% of its returns from the Biomedical Advanced Research and Development Authority while 24% of the corporation’s returns were from other sections of federal government (Mayes, 2020). The company made a gross loss of 5.75B.
Benchmarking Analysis
Johnson & Johnson Company makes more sales, gross profit, EBIT, EBITDA, and Net Income compared to Pfizer and Moderna. However, Pfizer provides a better Return on Equity of 27% compared to Moderna and Johnson & Johnson at -16.74% and 2.16% respectively.
Companies Analysis
Moderna has the highest equity value of 324.21 compared to Johnson & Johnson and Pfizer at 161.3 and 41.49 respectively. However, the enterprise value of Johnson & Johnson is 429.66B compared to Pfizer and Moderna at 41.49 and 324.21 respectively. However, gross profit. EBITDA, EBIT, and Net Income of Johnson & Johnson is higher compared to Pfizer and Moderna.
Recommendations
The paper supports the purchase of shares by Johnson & Johnson as the company is profitable and makes enough profit to pay its investors. Also, the company has a range of products and don’t rely on a single product for its returns.
References
Mayes, T. R. (2020). Financial analysis with microsoft excel. Cengage Learning.