Baby formula maker Mead Johnson Nutrition ( MJN ) on Tuesday caught a big upgrade from analysts at Deutsche Bank.
The firm said it boosted its rating on MJN from "Hold" to "Buy" with a $73 price target, suggesting a 12% upside to the stock's Monday closing price of $65.21.
A Deutsche analyst commented, "We use current macroeconomic concerns as an opportunity to raise our opinion. Rarely do companies with leading global share in rational categories with excellent margins and solid balance sheets see periods of weak equity performance. Despite a premium valuation, we see current dislocation as an opportunity."
Continuing, "Both for today's volatile market and for those with a L-T, reasons to own MJN stock are numerous including: (1) leading global share under the Enfamil brand, (2) growth in emerging markets, (3) high returns / profitability, (4) typical rational category behavior, (5) strong balance sheet, (6) experienced mgmt team."
Mead Johnson shares were unchanged in premarket trading Tuesday.
The Bottom Line
Shares of Mead Johnson ( MJN ) have a 1.59% dividend yield, based on last night's closing stock price of $65.21. The stock has technical support in the $60-$62 price area. If the stock can firm up, we see overhead resistance around the all-time high levels of $70-$72 a share.
Mead Johnson Nutrition ( MJN ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.
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