Johnson & Johnson Medtech Business Has Promising Momentum, Analysts Say After Good Q2 Performance

Credit Suisse analyst Trung Huynh increased the price for Johnson & Johnson JNJ to $175 from $170, with a Neutral rating. Thursday, Johnson & Johnson lifted FY23 guidance on the back of strong Medtech business sales growth.

The analyst says the company can continue this momentum to execute on the base business, and if headwinds for Med Devices are tempered, then this guidance may be conservative. 

Management disclosed that JNJ shareholders would have an opportunity to exchange JNJ shares for Kenvue shares with timing as early as the coming days. 

On Talc, JNJ noted it is looking at c.60k claimants to support the bankruptcy plan and expects additional support.

Credit Suisse analyst says the pharma giant posted an impressive quarter all round. The analyst is encouraged by the base business's recent performance and the Kenvue split's progress. 

The analyst notes that talc litigation is the big overhang, but it is optimistic despite the recent Hernandez Valadez outcome. 

Citi analyst Joanne Wuensch pointed out that Johnson & Johnson's shares have experienced underperformance year-to-date due to a mix of factors. These include ongoing talc litigation, the strategic decision to divest its Consumer business, and investors' tendency to favor assets with more apparent growth.

In the latest developments, Johnson & Johnson provided an update on the talc situation and announced plans to spin off Kenvue. This spin-off will be implemented via an exchange offer, effectively functioning as a share buyback for the remaining company. These moves are seen as crucial steps toward reshaping the future of Johnson & Johnson. The analyst reiterates the Buy rating.

Price Action: JNJ shares are up 1.14% at $170.31 on the last check Friday.