I've learned to be suspicious of apparent bargains among ultra-cap companies, and there are certainly enough moving parts to Johnson & Johnson (JNJ) to fill a small library of articles. Even so, while I can understand some concerns about growth and pipeline, as well as headline risks from lawsuits, JNJ shares look surprisingly interesting in a market where a lot of drug and device stocks enjoy elevated multiples.
For the short term, I expect worries to be focused on the pause of the Phase III COVID-19 vaccine trial, headline risk, and a potentially underlying stall in procedure recoveries. I also expect some concerns about the drug pipeline and JNJ's ability to offset patent expirations with internal R&D productivity. Even with that all factored in, a prospective high-single-digit return from a reliable performer isn't something to ignore.
Read more here:
Johnson & Johnson Curiously Valued In A Still-Healthy Med-Tech Sector
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