UPDATE: Goldman Sachs Color On JNJ Upgrade

Goldman Sachs, which upgraded shares of Johnson & Johnson JNJ, is providing some color on the stock. “We are upgrading JNJ to Buy from Neutral as we switch to JNJ from BMY as the best underappreciated new product story in US Pharma,” Goldman Sachs writes. “After two years of earnings and stock underperformance, JNJ may now be on the cusp of an accelerating earnings trajectory, driven by an emerging new product cycle in Pharma, signs of stabilization in MD&D, and a bottoming out in Consumer. “Over the next several months, JNJ will be launching three new drugs: Zytiga, telaprevir (EU), and Xarelto (US) – each targeting among the largest, most attractive therapeutic areas. Moreover, we expect a positive mix shift to drive operating margin expansion.” Johnson & Johnson closed Tuesday at $65.76.