In the novel, The Outsiders, Johnny Cade is painted as a very streetwise kid who can take care of himself. He's not on the 'top' of the heap as far as streetfighters go, but he can dish it out pretty well. However, we also learn that he is a street kid with a conscience, which becomes more fully developed through his friendship with Pony Boy. So, in specific terms, Yes, he could have taken the Undertaker, but the real question should be if he 'would have bothered to'. Towards the end, he's made a decision, though he doesn't say it verbally, to be a better person, and is realizing that maybe his life has some value. When someone realizes their own worth, they begin to see the worth of others, too.