Market Overview

Goldman Sachs Swaps Perrigo, Johnson & Johnson Ratings

Share:
Goldman Sachs Swaps Perrigo, Johnson & Johnson Ratings
Related JNJ
Cannabis Company Avicanna Eyes Canadian IPO
How To Approach Q4 Earnings: The Global Perspective
Massachusetts AG after Purdue Pharma owners for role in opioid crisis (Seeking Alpha)
Related PRGO
20 Stocks Moving In Wednesday's Pre-Market Session
5 Biggest Price Target Changes For Monday
Massachusetts AG after Purdue Pharma owners for role in opioid crisis (Seeking Alpha)

The iShares Dow Jones US Healthcare (ETF) (NYSE: IYH) is up marginally year-to-date, but the profits aren’t bleeding into all health care constituents.

The Ratings

Goldman Sachs analyst Jami Rubin upgraded Johnson & Johnson (NYSE: JNJ) from Sell to Neutral and maintained a $134 price target. Rubin downgraded Perrigo Company PLC (NYSE: PRGO) from Neutral to Sell and cut the price target from $78 to $74.

The Thesis

Rubin had been bearish on Johnson & Johnson only for its valuation, which she considered unjustly high relative to peers and given its poor earnings growth. As the stock now trades comparably with the group, it’s earned an upgrade, the analyst said in a Thursday note. (See Rubin's track record here.) 

Goldman’s steady price target reflects pharma’s outperformance as well as durability in both consumer products and medical devices and diagnostics.

Perrigo’s downgrade is similarly justified by relative peer performance, Rubin said. 

“We see no meaningful risk to numbers but expect the business to drift due to a lack of meaningful new launches in the pipeline,” the analyst said, referencing developments by Teva Pharmaceutical Industries Ltd (ADR) ADR (NYSE: TEVA) and Mylan NV (NASDAQ: MYL).

Perrigo's stabilizing prescription business is not seen to lend meaningful upside.

“Now consumer [over-the-counter] drives 75 percent of PRGO’s operating profits, and this industry is facing headwinds that we do not expect to abate anytime soon." 

Price Action

Perrigo was trading down 1.94 percent at $76.25 at the time of publication, while Johnson & Johnson was up 1.05 percent at $127.56. 

Related Links:

Analyst: Despite Industry Woes, Investigations, And Management Shake-Up, Perrigo Is A Buy

Analyst: Morphosys Is Well-Positioned To Continue Success With Antibody Discovery Platforms

Latest Ratings for JNJ

DateFirmActionFromTo
Jan 2019Wells FargoMaintainsOutperformOutperform
Jan 2019Morgan StanleyMaintainsEqual-WeightEqual-Weight
Jan 2019CitigroupMaintainsNeutralNeutral

View More Analyst Ratings for JNJ
View the Latest Analyst Ratings

Posted-In: Goldman SachsAnalyst Color Upgrades Downgrades Health Care Price Target Analyst Ratings General Best of Benzinga

 

Related Articles (IYH + JNJ)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
SHWKeyBancMaintains450.0
ACNCitigroupUpgrades169.0
CGBDJP MorganUpgrades15.5
NLYJP MorganUpgrades10.5
NTNXMorgan StanleyUpgrades58.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

Wall Street Sees A Bounce After Trade-Driven Losses

Mid-Morning Market Update: Markets Open Higher; Delta Air Lines Earnings Beat Estimates