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On Tuesday, TD Cowen reiterated its Buy rating on Johnson & Johnson (NYSE:JNJ) shares with a price target of $185.00. The firm’s analyst, Joshua Jennings, commented on a recent legal development involving the company’s talc litigation. A federal judge has rejected Johnson & Johnson’s latest attempt to settle talc-related claims through a bankruptcy trust. This decision, announced after a two-week trial, raised concerns about the voting process used in the proposed settlement.
Johnson & Johnson has not yet responded to the ruling, but is anticipated to issue a statement soon, outlining its next steps. The company had previously set aside a reserve for the settlement, which as of December 29, totaled $11.6 billion. This amount reflects a $13.5 billion nominal value, after accounting for payments made in 2024.
Despite the legal hurdle, TD Cowen believes that any potential decline in Johnson & Johnson’s stock price due to this news will be minimal and temporary. The analyst pointed out that investors have experienced similar challenges in the past when the company attempted to resolve its talc litigation. Based on this history, TD Cowen expects the stock to recover swiftly.
Johnson & Johnson’s ongoing legal issues regarding its talc products have been a point of focus for both the company and its investors. However, the analyst at TD Cowen remains confident in the company’s ability to manage the situation and maintain its financial health. The reaffirmed Buy rating reflects this optimism and suggests a continued positive outlook for the healthcare giant’s stock performance.
In other recent news, Johnson & Johnson has faced several significant legal and clinical developments. A U.S. bankruptcy judge rejected the company’s $10 billion proposal aimed at resolving numerous lawsuits alleging that its talc products caused ovarian cancer. This marks the third failed attempt by Johnson & Johnson to settle these claims through bankruptcy proceedings. Following this decision, legal battles will proceed in state courts and multidistrict litigation, with trials set to determine the company’s liability and potential compensation for claimants.
In another legal matter, a federal judge ordered a Johnson & Johnson unit to pay $1.64 billion in a lawsuit over the unlawful promotion of HIV drugs. The jury found the unit guilty of submitting false claims to government programs, although some state-level claims were dismissed. Additionally, Johnson & Johnson released positive results from its Phase 3 MARIPOSA study, showing that its RYBREVANT® combination therapy significantly extended overall survival in patients with advanced non-small cell lung cancer compared to an alternative treatment.
The study also highlighted an improvement in the time to symptomatic progression, suggesting a prolonged quality of life for patients. Meanwhile, UBS has maintained its Buy rating and $180 price target for Johnson & Johnson stock, despite ongoing legal challenges related to talc lawsuits. The firm noted that the uncertainty surrounding the resolution of these lawsuits could impact the company’s stock performance.
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