Why CNBC’s Jim Kramer on Thursday said to investors Johnson & Johnson Despite the wider healthcare sector behind, it is working well this year.
“There’s so much momentum, but it’s still a reasonable rating, so I think J&J can keep running for a while,” he said. “The next goal is the company’s all-time high of $186 in early 2022, and it has changed within its view of less than $10. I say it can go through $200 after that.”
Johnson & Johnson’s stock has been under pressure for many years by lawsuits related to talc products. So Cramer suggested that it might be surprising that the company was able to “eliminate the gravity of this healthcare bear market.” Currently, stocks have grown by more than 23% since the start of the year.
Cramer said that Johnson & Johnson’s legal issues have not been resolved, but he suggested that Wall Street is beginning to show past them due to recent changes to legal strategy and the strength of Pharma Business. Drug manufacturers are no longer seeking a radical settlement in bankruptcy, and instead are fighting lawsuits in court. For Kramer, it seems he now feels that “the plaintiff’s lawyer pursuing these cases has taken his hand.”
The market has been getting much worse with the names of large pharmaceuticals, but Kramer pointed out that Johnson & Johnson is not purely a pharmaceutical company. He continued, it has a rather large medical device arm, he continued. The company’s medical device business is a source of steady growth, Kramer said it is its cardiovascular category in particular. He also pointed to Johnson & Johnson’s techniques in other fields such as robotic surgery and neurovascular therapy.
Kramer said it’s strong since Johnson & Johnson cut off over-the-counter business two years ago, and he also likes the company’s drug portfolio. However, the Pharma giant faces a patent cliff in Stelara, where one of the main drugs, Stelara, is used to treat autoimmune conditions, Cramer admits. However, Johnson & Johnson has many other treatments that increase sales, particularly to treat certain cancers.
“Frankly, the strength of Pharma is that the drug business here is so huge,” he said. “In total, J&J has 13 drugs with double-digit growth rates, and overall, the remaining drug portfolio is growing very well, so the loss of Stelara’s exclusiveness – afterthoughts.”
“Our results reflect the depth and strength of our unique and diverse business,” a Johnson & Johnson spokesman told CNBC. “We expect growth to increase later this year and look forward to the next six months with game-changing approvals, including Inlexzo’s recent FDA approval in lung cancer and regional expected submissions such as lung cancer, major depressive disorder, psoriasis, surgery, and cardiovascular disease.”
