I'm reiterating my Buy rating for Johnson & Johnson (NYSE: JNJ), first recommended on May 20, 2009 at a price of $55.87. The value proposition with Johnson & Johnson 'isn't rocket science', as they say, even though the business model does involve a considerable amount of science.
Lower sales in pharmaceuticals, stents, and consumer products will weigh on JNJ's FY2009 revenue. Still, JNJ's diversified and demonstrated business model (drugs, medical devices, and consumer products) and decentralization has scored touchdowns in the past, and will again in the years ahead.
Technically, JNJ's chart has tested, broken though, then retreated from resistance at $60 on several occasions, so that is a concern, but at this juncture, with a P/E of 13 we'll just call it static, not anything substantive.
The First Call FY2009/FY2010 EPS estimates for JNJ are $4.52 to $4.89.
Stock Analysis: Johnson & Johnson is a moderate-risk stock. If you've already purchased the company's shares, hold them. If not, consider buying a 25% position in JNJ now; then buy another 25% in three months, if U.S. and global economic conditions don't worsen substantially. Under any circumstance, don't buy more than 50% of your JNJ position before December 2009. Sell/Stop Loss if you were to buy shares in this company: $36.
- -
Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.
Before the bell: Futures higher ahead of housing, jobless data
Nuclear power is on the comeback trail
Apple backs AT&T in continuing spat with Verizon
Add your comments