UBS analysts have upgraded shares of Johnson & Johnson (J&J) from Neutral to Buy ahead of its upcoming analyst day on Dec. 5. In a report released on Friday, the analysts expressed confidence in the company's Innovative Medicine division and projected growth in the MedTech market. They also raised their price target for J&J to $180 from $167, reflecting their positive outlook.
Despite ongoing legal concerns related to product liability claims, J&J has seen a decline of 12% in its stock this year. However, UBS believes that the stock has already factored in the potential outcomes of these claims and that current share prices do not fully reflect the company's potential.
In a recent development, J&J announced the acquisition of Laminar, a medical-device company specializing in non-valvular atrial fibrillation treatment. This acquisition is seen as a strategic move to strengthen J&J's position in the growing MedTech market, further reinforcing UBS's positive stance.
As a result of the acquisition, J&J has adjusted its earnings guidance for fiscal 2023, lowering it by approximately 17 cents per share. The new range is projected to be $9.90 to $9.96 per share, compared to analyst estimates of $10.05 per share. Additionally, the company expects a negative impact of 15 cents per share in fiscal 2024.
Wall Street opinions on J&J stock are mixed, with 43% of analysts surveyed rating it as Buy and 57% as Neutral.
Overall, UBS's bullish recommendation reflects optimism about J&J's prospects, particularly in its Innovative Medicine division and the MedTech market.