Please ensure Javascript is enabled for purposes of website accessibility

Why Johnson & Johnson Stock Fell 12% in December

By Demitri Kalogeropoulos - Updated Apr 15, 2019 at 9:57PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Bad press sent the healthcare titan's shares lower last month.

What happened

Johnson & Johnson (JNJ 1.13%) shares trailed the market last month as the stock lost 12% compared to a 9% slump in the S&P 500, according to data provided by S&P Global Market Intelligence.

The decline produced a modest underperformance for the healthcare giant over the year, with the stock shedding a bit more than the broader market's 6%.

Two scientists performing clinical research.

Image source: Getty Images.

So what

December's decline was driven by bad press. Specifically, a Reuters news article claimed that Johnson & Johnson's management team may have known about safety issues with its talc powder for much longer than previously revealed. Shares fell by more than 10% on the day this report hit newswires.

Now what 

The company defended itself about the allegations, saying in mid-December that the Reuters article was "false and inflammatory" and ignored the many safety tests that J&J has conducted over the years to show that its talc is free from asbestos and completely safe. Nevertheless, the company could be liable for any penalties that arise from this reporting, or at least a period of elevated legal defense expenses. In the meantime, investors are looking forward to hearing updates on its operating trends, including organic sales growth and profitability, when J&J reports fourth-quarter results on Jan. 22.

Check out the latest Johnson & Johnson earnings call transcript.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Johnson & Johnson Stock Quote
Johnson & Johnson
JNJ
$179.52 (1.13%) $2.01

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
316%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/03/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.