Opinions Jim Cramer - Mad Money
Johnson & JohnsonJNJSELLMar 13, 2024
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 gave up on JNJ (and made a small profit), because he was tired of being held hostage to legal decisions that had little to do with the greatness of this company. The legality concerned traces of asbestos in its baby powder that may have caused cancer in some customers. Twenty years ago, any whiff of an asbestos lawsuit would have triggered an instant sell. He forget how ugly such lawsuits could be. In the 1980s, a number of companies lost asbestos lawsuits. After researching the JNJ suit, he concluded that JNJ acted in good faith or didn't know about the asbestos or an accident at worst. Turns out that was a mis-judgement he made. A seemingly endless number of lawsuits were launch, and there was a $2 billion judgement against JNJ that stated that the company didn't take the plaintiff seriously enough. Then, JNJ paid $8.9 billion to the plaintiffs, which he thought was a brilliant strategy, but the 3rd-circuit court in Philadelphia hated this settlement. Meanwhile, JNJ reported a terrific quarter and spun-off its consumer products division successfully. He bought JNJ for its fundamentals, but he was actually betting on the thing that controlled the stock--the litigation. You never want to play that game. In the end, he was far too sanguine about JNJ's handling of the lawsuits. When a judge ruled that JNJ would not go bankrupt or blocked the company pursuing bankruptcy. That's when he sold.