Printer Friendly

J&J stock reaction, comparisons to Bayer 'flawed,' says Morgan Stanley.

Morgan Stanley analyst David Lewis said he is not convinced that Friday's article from Reuters uncovered new evidence that was not presented to Johnson & Johnson (JNJ) juries or part of the ongoing legal discovery process, but that it has raised a level of awareness around the issue and may inflate the company's potential legal exposure. The stock reaction is not supported by science as linking ovarian cancer broadly to talc will be challenging, contends Lewis, who believes the selloff in J&J shares appears too severe. Additionally, investor concerns that talc issues could lead to a Bayer-like (BAYRY) reaction have a flaw in the analysis of financial exposure, as glyphosate and its derivatives represent about 30% of Bayer's corporate EBITDA, while baby powder is less than 0.3% of J&J's sales and an "immaterial" percentage of EBITDA, said Lewis. He maintains an Equal Weight rating on Johnson & Johnson with a price target of $153.

COPYRIGHT 2018 The Fly
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2018 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:The Fly
Date:Dec 17, 2018
Words:155
Previous Article:Trinity Industries CFO James Perry to depart.
Next Article:Treasury Market Outlook: Treasury yields have dipped 1 bp lower.
Topics:

Terms of use | Privacy policy | Copyright © 2019 Farlex, Inc. | Feedback | For webmasters