Opinions Jim Cramer - Mad Money
Johnson & JohnsonJNJSELLJul 31, 2023
Stock price when the opinion was issued
As of Jun 08, 2026. Market Open.
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Owns neither. Of the two, he'd prefer JNJ. Hesitant to put them in the same basket. With spinoff of healthcare, it's now much more into pharmaceuticals (doing very well) and medical devices. Valuation is not that demanding. Executing well.
PG is a consumer products company. Consumer is in some difficulty, and jury's out as to whether we've seen the worst of that dip.
Great year, so valuation has expanded. Shedding lower-growth businesses, focusing on medical devices and pharma. Those 2 areas are higher-margin businesses, so success would mean multiple could continue to expand. Legal overhang diminished.
If you already own it, you can hold it for dividend growth and potential upside. If you don't own, buy via an ETF.
Tough one. Spun out KVUE, which is in a nice space, but the stock's done nothing. JNJ is now more drugs and medical devices, and its stock's done nothing either. Drug companies are difficult to own, really have to do your homework.
He doesn't want to recommend selling. Drug pipeline sounds good. Good earnings release, and has a bit of earnings momentum behind it. So might not be the time to sell. Yield is ~3%.
High in 2022, series of lower highs and lower lows since then. Only positive is that on the most recent pullback it pulled back to a higher low. If you own it as one position among many, you probably won't lose a bunch of $$. Doesn't see it being a leading stock in the near term.
Lean into companies that are economically sensitive with pricing power; if their costs go up tomorrow, they can raise prices the next day.
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He didn't sell it because of its fundamentals. It has a fine pharma pipeline and medical devices business. He sold because JNJ is knee-deep in lawsuits over its baby powder causing cancer (talc allegedly containing traces of asbestos). At first, he gave JNJ the benefit of the doubt, but since then the lawsuits keep coming and JNJ has lost some, including a $2 billion judgement. He felt hopeful when JNJ offered to settle in North America by paying $8.9 billion. Then JNJ reported a terrific quarter and spun off a business. But overall, you don't want to bet on litigation and he admits he was too sanguine about these lawsuits. Last Friday, a judge ruled that JNJ didn't have the right to settle all these lawsuits in bankruptcy, because the company was not in financial distress. It's not worth it to hope that down the road JNJ wins in the supreme court. Hope should not be part of the investing equation. There's no telling how bad all these lawsuits could be on JNJ. He bets on businesses, now lawsuits.