Citi Raises Mead Johnson's Price Target To $100 Ahead Of Q1 Report

Citi remains "positive" on Mead Johnson Nutrition CO (NYSE: MJN) ahead of its first quarter earnings report, and raised the profit estimate and target price to $100 from $85.Mead Johnson, which is known for its pediatric nutrition brand Enfamil, is expected to release its first quarter 2016 earnings on April 28, 2016, before the market opens.Analyst David Driscoll views that the investor concerns on the Chinese competitive and pricing scenario are overblown and the stock has key catalysts in the second half of the year."We think the deepest fears of investors about the current pricing/promotional and competitive environment in China are overblown, as on a holistic basis, our survey data shows more signs of stabilization," Driscoll wrote in a note to clients.The analyst raised his first quarter EPS view to $0.85 (in-line with consensus) from $0.83, while his above consensus 2016 EPS estimate of $3.55 remains unchanged. Wall Street analysts, on average, expect earnings of $0.85 for the first quarter and $3.51 a share for the full year 2016.Citi said its survey showed that sequential changes in formula pricing in China in the first quarter were generally "modest," while brick & mortar retailers were incrementally sequentially less negative on Mead's sales trends. In addition, the survey indicated that the company's imported formula resulted in volume increases.Driscoll noted that the U.S. sales should boost first quarter profit as its non-WIC business shows solid volume growth at 3 percent and category pricing is "holding up" despite massive dairy deflation in the country. In the second half, the analyst expects Mead's top-line returns to growth, driven by easy comps and benefits from the new China strategy.Driscoll reiterated his Buy rating saying "Beyond the top-line improvement, we see the real possibility of further cost reduction actions, and a takeout scenario remains in play. As such, we see value creation optionality in Mead shares."Shares of Mead Johnson closed Friday's regular trading session at $84.29.