|Back to main|
12/9/2010 1:54:29 PM
Health care giant Johnson & Johnson ( JNJ ) on Thursday caught a downgrade from analysts at Wells Fargo, who cited concerns about a possible shutdown of a drugmaking plant in Puerto Rico.
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
Johnson & Johnson ( JNJ ) is a "Recommended" dividend stock, holding a Dividend.com DARS™ Rating of 3.5 out of 5 stars.