Analyst Sees Big Divestitures Upcoming For Johnson & Johnson

Johnson & Johnson's JNJ prediction for its "other income" line in both 2015 and 2016 suggests that additional sizable divestitures are on the horizon, an analyst said Wednesday. Bank of America's Robert Hopkins said that should those divestitures fail to materialize, investors will need to wait until 2017 to see meaningful income growth at the health care giant. New Brunswick, New Jersey based company forecast 2015 other income of $2.2 billion and a potentially similar amount in 2016. The line item, which includes gains from the sale of assets, historically has averaged about $600 million, according to Hopkins. But well above-average gains are included Johnson & Johnson's forecast for adjusted 2015 income and the company "apparently plans on doing the same in 2016," Hopkins said. "It suggests additional sizable divestitures are likely," according to Hopkins, who maintained a Neutral rating and $105 target on Johnson & Johnson. The company last month agreed to sell its vascular technology unit called Cordis for nearly $2 billion to Cardinal Health Inc. CAH. http://www.investor.jnj.com/releasedetail.cfm?ReleaseID=899113 The deal was part of the company's "portfolio management approach to focus on our most promising opportunities," Gary Pruden, chairman of the company's Surgery Group said at the time. In 2014, Johnson & Johnson obtained about $4 billion from the sale of its Ortho-Clinical Diagnostics business, to the Carlyle Group, a private equity firm. Johnson & Johnson, which beat first-quarter expectations Tuesday, changed hands recently at $100.90, up $0.38 cents. is likely to make sizable divestitures