Health care giant Johnson & Johnson (
) on Thursday caught a downgrade from analysts at Wells Fargo, who
cited concerns about a possible shutdown of a drugmaking plant in
The firm said it cut its rating on JNJ from "Outperform" to
"Market Perform" and lowered its Valuation Range to $64-$65 from
$68-$69. That new range implies a small upside to the stock's
Wednesday closing price of $62.45.
A Wells analyst commented, "We are lowering our rating on JNJ
based on risk associated with its McNeil OTC manufacturing
situation. Following additional consultant calls after our last JNJ
note on November 30, we now see a 25-50% chance of a shut down of
the Las Piedras, Puerto Rico (PR) facility as a result of the Form
483 issued on November 2. With this risk on the horizon and few
positive catalysts likely in the next 6 months, we expect JNJ
shares to be range bound and prefer to move to the sideline until
there is some clarity on the situation."
Johnson & Johnson shares fell 51 cents, or -0.8%, in
premarket trading Thursday.
The Bottom Line
We have been recommending shares of Johnson & Johnson (
) since Oct.8, 2009, when the stock was trading at $60.71. The
company has a 3.46% dividend yield, based on last night's closing
stock price of $62.45.
Johnson & Johnson (
) is a "Recommended" dividend stock, holding a Dividend.com DARS™
Rating of 3.5 out of 5 stars.
Be sure to visit our complete recommended list of the
Best Dividend Stocks
, as well as a detailed explanation of
our ratings system here
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