UPDATE: Mead Johnson (MJN) Cooperating with China in Antitrust Investigation
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Price: $89.98 --0%
Rating Summary:
3 Buy, 15 Hold, 1 Sell
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Today's Overall Ratings:
Up: 11 | Down: 14 | New: 1
Rating Summary:
3 Buy, 15 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 14 | New: 1
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(Updated - July 2, 2013 2:26 PM EDT)
Shares of Mead Johnson Nutrition (NYSE: MJN) declined on Tuesday. The decline follows reports that it and Abbott Laboratories (NYSE: ABT) are among five foreign infant milk companies under investigation in China for possible antitrust violations.
In response, Mead Johnson Nutrition announced today that it is committed to providing high-quality and safe products at a good value for consumers in China and throughout the world.
"The company is fully cooperating with the recently reported Chinese government antitrust review of resale prices in the infant formula market and will provide information in response to inquiries received from government officials," said a statement.
Commenting, Wells Fargo analyst John Baumgartner said, "We view the news as a negative for sentiment and expect the stock to open lower. It further limits visibility in MJN's largest market (30% of sales) following March's formula shipment restrictions. We perceive the NDRC's action to be less a matter of '"antitrust" or "price fixing" and more an indication that increased focus will be placed on high category prices."
"Theoretically, it may limit Mead's near-term ability to raise prices to offset dairy inflation, but we've long been of the opinion that it already wasn't politically palatable to raise prices and have not modeled any increases within China. We intend to continue to follow the story but emphasize this is not Mead-specific and expect consumers will continue to seek foreign sourced product until concerns over local supplies ease (a multiyear horizon)," he added.
Shares of Mead Johnson Nutrition declined by over 5% on Tuesday.
Wells Fargo has a Market Perform rating on Mead Johnson.
For an analyst ratings summary and ratings history on Mead Johnson Nutrition (NYSE: MJN) click here. For more ratings news on Mead Johnson Nutrition click here.
Shares of Mead Johnson Nutrition closed at $79.43 yesterday.
Shares of Mead Johnson Nutrition (NYSE: MJN) declined on Tuesday. The decline follows reports that it and Abbott Laboratories (NYSE: ABT) are among five foreign infant milk companies under investigation in China for possible antitrust violations.
In response, Mead Johnson Nutrition announced today that it is committed to providing high-quality and safe products at a good value for consumers in China and throughout the world.
"The company is fully cooperating with the recently reported Chinese government antitrust review of resale prices in the infant formula market and will provide information in response to inquiries received from government officials," said a statement.
Commenting, Wells Fargo analyst John Baumgartner said, "We view the news as a negative for sentiment and expect the stock to open lower. It further limits visibility in MJN's largest market (30% of sales) following March's formula shipment restrictions. We perceive the NDRC's action to be less a matter of '"antitrust" or "price fixing" and more an indication that increased focus will be placed on high category prices."
"Theoretically, it may limit Mead's near-term ability to raise prices to offset dairy inflation, but we've long been of the opinion that it already wasn't politically palatable to raise prices and have not modeled any increases within China. We intend to continue to follow the story but emphasize this is not Mead-specific and expect consumers will continue to seek foreign sourced product until concerns over local supplies ease (a multiyear horizon)," he added.
Shares of Mead Johnson Nutrition declined by over 5% on Tuesday.
Wells Fargo has a Market Perform rating on Mead Johnson.
For an analyst ratings summary and ratings history on Mead Johnson Nutrition (NYSE: MJN) click here. For more ratings news on Mead Johnson Nutrition click here.
Shares of Mead Johnson Nutrition closed at $79.43 yesterday.
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