What's Going On With Johnson & Johnson Stock?

Johnson & Johnson JNJ shares are trading higher Wednesday after the company's subsidiary LTL Management re-filed for bankruptcy to resolve all talc-based baby powder claims.

What To Know: Johnson & Johnson has re-filed for voluntary Chapter 11 and agreed to contribute up to $8.9 billion over 25 years to resolve all the current and future talc claims, which is an increase of $6.9 billion over the previously committed amount.

After facing thousands of lawsuits claiming JNJ's talc-based products cause cancer, the company spun off LTL Management and filed an initial bankruptcy in October 2021, agreeing to pay $2 billion to resolve claims. Johnson & Johnson has since stopped selling its talc-based baby powder.

LTL Management has secured commitments from over 60,000 current claimants to support a global resolution on the new terms.

"The Company continues to believe that these claims are specious and lack scientific merit. However, as the Bankruptcy Court recognized, resolving these cases in the tort system would take decades and impose significant costs on LTL and the system," said Erik Haas, Worldwide Vice President of Litigation at Johnson & Johnson.

"Resolving this matter through the proposed reorganization plan is both more equitable and more efficient, allows claimants to be compensated in a timely manner."

Shares are reacting favorably as this puts a potential resolution on the table. The ongoing claims have been an overhang on the stock as the company has already paid billions in talc-related litigation fees according to its annual reports. 

Johnson & Johnson is scheduled to report first-quarter results on April 18. The company is expected to report earnings of $2.52 per share on quarterly revenue of $23.67 billion, according to Benzinga Pro.

JNJ Price Action: JNJ has a 52-week high of $186.68 and a 52-week low of $150.11.

The stock was up 2.53% at $162.50 at the time of writing, according to Benzinga Pro.

Photo: Mike Mozart from Flickr.