XLV - Johnson & Johnson: Legal Woes Are Detrimental But Not Fatal

2024-04-22 13:04:38 ET

Summary

• Johnson & Johnson stock has continued to underperform the healthcare sector, worrying JNJ investors.
• JNJ's potentially massive talc-related legal liabilities will likely affect buying sentiment.
• However, it's easy to forget that JNJ is a fundamentally strong business with robust free cash flow profitability.
• Investors should be careful about buying JNJ when overvalued, but it's not.
• Dip-buyers were assessed to have returned with conviction last week, providing JNJ investors another solid buying opportunity.

Johnson & Johnson ( JNJ ) investors have had to deal with massive downside volatility as JNJ continues underperforming its healthcare sector ( XLV ) peers. I maintained my bullish thesis on JNJ in my previous article. However, JNJ's continued underperformance has continued to baffle me, suggesting the market remains concerned over the structural impediments attributed to its potential legal liabilities....

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