Johnson & Johnson Sales Fall: What The Street Is Saying Now

• Johnson & Johnson (NYSE: JNJ)’s Q3 revenue came up short of consensus estimates, but the company managed to beat on its EPS number.
• The company also announced an additional $10 billion in share buybacks.
• Wall Street firms and the market seems split on how to interpret the company’s quarter.

Johnson & Johnson has reported a modest Q3 revenue miss but still managed to beat consensus EPS expectations on the strength of its “Other Income” category. After selling off hard on Tuesday's open, the stock has now rebounded to flat as the market seems not to know what to make of the report.

Here’s what four Wall Street firms had to say following Johnson & Johnson's earnings.

Morgan Stanley
Analyst David Lewis sees the announcement of a $10 billion in buyback as “an incremental positive in terms of capital,” but is unsure of what the buyback means in terms of M&A prospects. The firm has an Equal-weight rating on the stock.

Goldman Sachs
Analyst Jami Rubin sees the report as “a solid start to earnings” but views the $10 billion buyback as “a drop in the bucket.” Rubin feels that the company could (and should) be much more aggressive with its large capital base. The firm maintains its Sell rating on the stock.

Deutsche Bank
Analyst Kristen Stewart was caught off guard by the 8.2 percent forex headwind the company faced in the quarter and adds that “excluding the net impact of acquisitions and divestitures, sales were up 5.6%.” The firm maintains its Buy rating on the stock.

Credit Suisse
Analyst Vamil Divan also questioned the $10 billion buyback’s potential impact on the company’s ability to make large acquisitions, but added that he believes that overall, the buyback “should be well-received.” The firm maintains its Neutral rating on the stock.

Disclosure: the author holds no position in the stocks mentioned.