J&J agrees to pay huge cancer claims!

3:58 PM 5 April 2023

Johnson & Johnson stock rose 3.1% after a unit of the consumer healthcare giant refiled for bankruptcy protection as part of a deal that offered to pay $8.9 billion to resolve cancer lawsuits related to its talc-based powders. Johnson & Johnson underlines that the settlement is not an admission of guilt or wrongdoing.

LTL Management – which is a JNJ subsidiary company will pay the money over 25 years to resolve more than 60 thousands claims that the company’s product (baby powder) caused people to develop cancer.

Analysts indicate that the above information may have a positive impact on the price of JNJ stock.

According to a JPMorgan analyst $8.9bn committed is in line with their $8-10bn estimate. Similarly analysts from Wells Fargo indicated that it is even slightly higher than expectation of a $10bn settlement.

Markets reacted positively to the above information, the company's shares gained over 3% in the pre-opening phase – trading above $160, which suggests a higher opening during the stock exchange session. The price is back in the consolidation zone. The next move may be crucial for further price development.

 

Johnson & Johnson (JNJ) stock price, source: xStation 5

 

 

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