UBS Maintains a 'Buy' on Johnson & Johnson (JNJ); Management Meeting Reinforces Improving Outlook

December 12, 2011 12:14 PM EST Send to a Friend
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Price: $101.10 +0.74%

Rating Summary:
    7 Buy, 15 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 26 | Down: 24 | New: 24
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UBS maintains a 'Buy' on Johnson & Johnson (NYSE: JNJ) price target lowered from $72 to $69.

UBS analyst says, "We had an opportunity to meet w/ CFO Dominic Caruso & Vice Chairman Sheri McCoy. On our estimates, we bumped ’12 & ’13 EPS modestly by $0.02 to $5.19 (+4%) & $5.67 (+9%) as we now assume significant share repo to offset SYST issuance (Street: $5.24 & $5.63). Further, mgmt seemed more upbeat on ’12 margin expansion. We continue to model improving organic rev growth on Pharma new products & Consumer re-launches (~2.5% in ’11; ~4% in ’12; ~5.5% in ’13)."

"Returning to a margin expansion outlook - Pharma will be the strongest driver; launch expenses to persist but incremental spend will be less than sales growth. Consumer more or less as re-investment behind re-launched brands may be needed. Despite headwinds on price & volumes, MD&D will benefit from a major reorganization into 3 broad op groups while benefits from supply chain initiatives also play out. Including SYST, we model 60 / 110bps of op mgn expansion in ’12 / ’13 (40 / 70bps ex-SYST)."

For an analyst ratings summary and ratings history on Johnson & Johnson click here. For more ratings news on Johnson & Johnson click here.

Shares of Johnson & Johnson closed at $64.53 yesterday.


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