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Investment Firm Gives Johnson & Johnson a Rave Review, Expecting Stellar Performance Ahead

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Johnson & Johnson offices in Silicon Valley

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Surging ahead by 0.9% in premarket hours on Friday, Johnson & Johnson (NYSE:JNJ) is receiving a major confidence boost from UBS. The investment firm has upgraded the healthcare giant to Buy from Neutral, expressing β€œhigh conviction” in a forecast that surpasses expectations.

Analyst Danielle Antalffy from UBS is banking on J&J achieving its sales guidance of $83.6B–$84.0B and an EPS forecast of $10.07–$10.13, which notably exceeds the current consensus of $10.07. Additionally, Antalffy is optimistic about J&J’s medtech business, predicting growth in line with the market. This comes on the heels of J&J’s recent announcement of acquiring the privately-held medical device company Laminar for its medtech arm.

Antalffy is also banking on the innovation medicines division delivering 3.7% growth between 2022-2025, particularly emphasizing the potential of the anti-cancer monoclonal antibody drug, Darzalex (daratumumab), which is yet to be fully captured. The timing of the UBS upgrade is strategic, aligning with the healthcare company’s upcoming capital markets day on December 5. While acknowledging that the current valuation reflects potential risks associated with ongoing litigation related to J&J’s talc products, Antalffy expects some residual headline risk to persist.

The SA Quant system maintains a Hold rating for the stock, while both SA and Wall Street analysts have a Buy outlook for J&J (JNJ).

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