Enterprise Value to EBITDA (EV/EBITDA)
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
Johnson & Johnson, EBITDA calculation
US$ in millions
Based on: 10-K (reporting date: 2024-12-29), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
The analysis of the annual financial data over the five-year period reveals notable fluctuations in earnings and profitability metrics.
- Net Earnings
- Net earnings exhibited a fluctuating trend, starting at 14,714 million US dollars in 2020 and increasing significantly to a peak of 35,153 million US dollars in 2023. However, this was followed by a sharp decline to 14,066 million US dollars in 2024, nearly returning to the 2020 level.
- Earnings Before Tax (EBT)
- EBT showed growth from 16,497 million US dollars in 2020 to a peak of 22,776 million US dollars in 2021, before declining to 21,725 million in 2022. Thereafter, it experienced a further decline to 15,062 million in 2023, then rebounded slightly to 16,687 million in 2024. The trend suggests variability with a general downtrend after 2021.
- Earnings Before Interest and Tax (EBIT)
- EBIT followed a similar pattern to EBT, increasing from 16,698 million US dollars in 2020 to 22,959 million in 2021, then gradually declining over the next two years to 15,834 million in 2023 before a modest recovery to 17,442 million in 2024. This indicates some volatility in operational profitability.
- Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA)
- EBITDA was highest in 2021 at 30,349 million US dollars, rising from 23,929 million in 2020. It then declined steadily to 23,320 million in 2023 before a slight increase to 24,781 million in 2024. The pattern shows a peak followed by a reduction, indicative of contraction in operating cash flow generation capacity after 2021.
Overall, the financial data underscores a peak in earnings and profitability measures around 2021, followed by a period of decline with some partial recovery in 2024. The sharp drop in net earnings in 2024 contrasts with more moderate improvements in EBT, EBIT, and EBITDA, suggesting possible impacts from tax, interest, or other non-operating expenses in the most recent year.
Enterprise Value to EBITDA Ratio, Current
Johnson & Johnson, current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 378,509) |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 24,781) |
| Valuation Ratio | |
| EV/EBITDA | 15.27 |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| AbbVie Inc. | 26.10 |
| Amgen Inc. | 14.89 |
| Bristol-Myers Squibb Co. | 42.25 |
| Danaher Corp. | 21.69 |
| Eli Lilly & Co. | 51.30 |
| Gilead Sciences Inc. | 33.47 |
| Merck & Co. Inc. | 8.70 |
| Pfizer Inc. | 10.05 |
| Regeneron Pharmaceuticals Inc. | 9.38 |
| Thermo Fisher Scientific Inc. | 15.72 |
| Vertex Pharmaceuticals Inc. | 223.09 |
| EV/EBITDA, Sector | |
| Pharmaceuticals, Biotechnology & Life Sciences | 20.32 |
| EV/EBITDA, Industry | |
| Health Care | 18.46 |
Based on: 10-K (reporting date: 2024-12-29).
1 Click competitor name to see calculations.
If the company EV/EBITDA is lower then the EV/EBITDA of benchmark then company is relatively undervalued.
Otherwise, if the company EV/EBITDA is higher then the EV/EBITDA of benchmark then company is relatively overvalued.
Enterprise Value to EBITDA Ratio, Historical
Johnson & Johnson, historical EV/EBITDA calculation, comparison to benchmarks
| Dec 29, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Enterprise value (EV)1 | 390,710) | 383,498) | 428,242) | 439,101) | 435,585) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | 24,781) | 23,320) | 28,971) | 30,349) | 23,929) | |
| Valuation Ratio | ||||||
| EV/EBITDA3 | 15.77 | 16.45 | 14.78 | 14.47 | 18.20 | |
| Benchmarks | ||||||
| EV/EBITDA, Competitors4 | ||||||
| AbbVie Inc. | 26.97 | 20.79 | 13.31 | 13.44 | 21.34 | |
| Amgen Inc. | 15.31 | 14.13 | 12.97 | 13.22 | 12.24 | |
| Bristol-Myers Squibb Co. | 48.23 | 6.51 | 9.46 | 8.65 | 34.35 | |
| Danaher Corp. | 22.34 | 26.41 | 18.42 | 21.05 | 26.68 | |
| Eli Lilly & Co. | 55.98 | 85.33 | 37.74 | 29.85 | 23.67 | |
| Gilead Sciences Inc. | 35.86 | 10.41 | 13.89 | 8.57 | 24.90 | |
| Merck & Co. Inc. | 9.90 | 51.30 | 13.91 | 12.18 | 16.05 | |
| Pfizer Inc. | 10.60 | 22.50 | 6.12 | 8.64 | 15.78 | |
| Regeneron Pharmaceuticals Inc. | 13.55 | 20.16 | 15.27 | 6.68 | 12.70 | |
| Thermo Fisher Scientific Inc. | 19.89 | 21.83 | 20.25 | 20.21 | 18.72 | |
| Vertex Pharmaceuticals Inc. | 231.93 | 21.57 | 14.91 | 18.92 | 14.81 | |
| EV/EBITDA, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 22.07 | 22.59 | 13.58 | 13.16 | 18.90 | |
| EV/EBITDA, Industry | ||||||
| Health Care | 20.34 | 19.28 | 13.93 | 14.07 | 17.33 | |
Based on: 10-K (reporting date: 2024-12-29), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
3 2024 Calculation
EV/EBITDA = EV ÷ EBITDA
= 390,710 ÷ 24,781 = 15.77
4 Click competitor name to see calculations.
The analysis of the financial data over the five-year span reveals several key trends and insights regarding the company's valuation and earnings before interest, tax, depreciation, and amortization (EBITDA).
- Enterprise Value (EV)
- The enterprise value demonstrates a relatively stable yet slightly declining pattern. Starting at approximately US$435.6 billion at the end of 2020, EV fluctuated marginally over the subsequent years, peaking at US$439.1 billion in 2021, followed by a gradual decrease to US$383.5 billion by the end of 2023. A minor recovery is noted in 2024 with an EV of US$390.7 billion. Overall, the trend indicates a modest decline in valuation over the period, with some variability year-to-year.
- Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA)
- EBITDA exhibited an initial strong upward movement, increasing from US$23.9 billion at the end of 2020 to a peak of US$30.3 billion in 2021. This was followed by a decrease to roughly US$28.97 billion in 2022, then a more pronounced contraction to US$23.3 billion in 2023. In 2024, EBITDA rose slightly to approximately US$24.8 billion. The pattern reflects volatility in earnings with a peak in 2021 and a significant dip thereafter, partially recovering in the last recorded year.
- EV/EBITDA Ratio
- The valuation multiple, expressed as EV/EBITDA, started at 18.2 in 2020, suggesting a relatively high market valuation relative to earnings. It dropped significantly to 14.47 in 2021, indicating a more favorable valuation or increased earnings relative to EV. In 2022, the ratio saw a minor increase to 14.78, followed by a rise to 16.45 in 2023 and a slight decrease to 15.77 in 2024. These fluctuations imply changing market perceptions of profitability and risk, with a peak valuation relative to earnings in 2020 and a moderation thereafter.
In summary, the data indicate that while enterprise value has moderately declined over the period, EBITDA experienced more pronounced fluctuations, peaking in 2021 before decreasing and partially recovering. The EV/EBITDA ratio movements reflect these changes and suggest variations in market valuation relative to earnings, with the lowest multiples occurring during periods of higher EBITDA. These trends may warrant further investigation into operational factors and market conditions impacting earnings and valuation.