
NYSE:JNJ
This summary was created by AI, based on 12 opinions in the last 12 months.
Johnson & Johnson (JNJ) has been experiencing a transformative period, especially following the spinoff of its orthopedics division, allowing it to focus more on pharmaceuticals and medical devices. Experts have highlighted the company's strong drug pipeline and robust performance in its core pharmaceutical business, which has led to a significant increase in stock value this year. Despite some concerns regarding ongoing talcum powder litigation and its past underwhelming performance, many analysts believe the legal risks are diminishing. The stock is seen as a better long-term hold, with potential dividend growth, especially amidst a broader economic context affecting consumer products. Overall, JNJ is viewed as an attractive investment, particularly when bought on weakness, with the valuation appearing favorable due to its premium position in the healthcare sector.
JNJ vs. ABT Similar businesses. You absolutely need exposure to healthcare. He holds JNJ for the dividend aristocrat qualities. ABT has been impressive. Testing platform has been phenomenal and will continue to ramp up. It's a great addition to portfolios at these levels. Tough choice between the two, but ABT probably has more immediate upside.
It's not cyclical enough to thrive. They're diversified in pharma (drugs) and medical devices. The former benefited from the lockdown from a stockpile in meds they were able to still sell, but now he doesn't know if medical devices can fully benefit from the backlog of surgeries that is being addressed now. Doesn't know if JNJ leads in medical devices. Also, JNJ isn't cyclical, which is where should be flowing. JNJ is trying to respond to the rise of robotic surgery by Intuitive Surgical, which he prefers. This take time and research for JNJ, which means Intuitive will still be ahead of JNJ. JNJ as a defensive will underperform cyclicals, which is where the market is heading as we exit this recession.
JNJ vs ABBV? He likes JNJ as a long term winner. It may be too expensive. ABBV was a risky company until they purchased Allergan and diversified their business more. ABBV trades at 8.4 times PE and earnings are expected to grow by 8% and have nice, safe dividend. They are still tethered to Humara, which has a lot of generics being developed. He would favor ABBV, although it is a little riskier than JNJ.
One of the companies going through a vaccine trial. They were in the news recently because they had to pause trials due to an illness in a test participant. However, it is not just about the vaccine. They have consumer, pharma and medical device. There is still litigation list from the talc issue. It trades at 15x earnings, which is reasonable but it does take into account vulnerabilities. He prefers BDX.