Morgan Stanley Equal Weight On Johnson & Johnson (JNJ)

Morgan Stanley has an Equalweight rating on shares of Johnson & Johnson JNJ. In a note to clients, Morgan Stanley writes, "J&J's settlement with Merck looks to be slightly (0-1%) more accretive than our prior estimates. We previously published a probability-weighted scenario analysis that calculated a ~1.6% estimated EPS upside (Xarelto & Remicade Optionality Priced In, 11/10/2010). Our updated estimate suggests the finalized deal may be worth 2.0-2.5% in EPS. Stock implications are likely minor. Strategically, increasing earnings exposure to pharmaceuticals may make J&J less likely to acquire pharma businesses." Shares of JNJ are up 44 cents in early Friday trading to $60.46, a gain of 0.7%.