Johnson & Johnson (JNJ -0.46%) stock had a bit of a hangover Wednesday. Following the estimates-beating third-quarter results that the company posted Tuesday, its share price fell by more than 2%. That tumble exceeded the 1.3% decline of the benchmark S&P 500 index.
Johnson & Johnson was hit with a pair of price target cuts
Before the market open Wednesday, a pair of pundits tracking Johnson & Johnson stock lowered their fair value estimations of the healthcare giant.
Terrance Flynn from white-shoe investment bank Morgan Stanley lowered his by $3 to a new price target of $171 per share. Jayson Bedford of Raymond James made a slightly deeper cut, reducing his target to $172 from the preceding level of $179.
Although their new price targets are very close, the two analysts have different recommendations on Johnson & Johnson. Flynn maintained his equal weight (read: hold) tag on the stock, while Bedford kept his outperform (buy) rating intact.
While neither move was particularly drastic, taken together, they acted as a bit of a damper on the stock in the wake of what was generally considered a solid quarterly report. Johnson & Johnson -- now a slimmed-down and more focused healthcare company following the spinoff of its consumer-products business as Kenvue -- handily beat analysts' consensus estimates for the quarter and raised its full-year guidance.
The bulls might do best by hanging on
Johnson & Johnson bulls shouldn't be too shaken by Wednesday's share price dip, nor by the two price target cuts. There was much to like in that earnings report, and as ever, the company (even in post-divestment form) continues to perform well and throw off enough cash to fuel a relatively generous dividend that, at the current share price, yields over 3%.
