Goldman Sachs Downgrades Mead Johnson Nutrition Co. to Neutral Citing Effect of Price Reductions and Lower Visibility

In a report published on Wednesday, Goldman Sachs analyst Jason English Downgraded Mead Johnson Nutrition Co.

to Neutral from CL-Buy and lowered the price target to $83 from $96. In the report, Goldman Sachs noted, "It is also unclear what the ultimate implications of the other ongoing regulatory changes will be. The government is targeting finalization of recommendations by August 31 – more headlines are likely between now and then. We lower our 12-month price target to $83, from $96, on lower estimates and lower multiples given lack of visibility. Our price is based on an 85% fundamental value P/E (23X, from 24X) and EV/EBITDA (14X, from 15X) weighting and 15% M&A EV/EBITDA (20X) weighting. Risks include better/worse regulatory outcomes, end-market growth, and competitive dynamics". Mead Johnson Nutrition closed on Tuesday at $74.90.