Johnson & Johnson set to buy back billions of dollars in shares

The repurchases, to be financed with debt and to have no time limit, would remove about 3.8 percent of the company’s outstanding shares.

A number of equities research analysts have issued reports on JNJ shares. Now, buybacks create an illusion that the stocks were undervalued; hence, the company made a decision to buy them back, ignoring the fact that, had the company expected to generate more earnings by retaining cash, it wouldn’t be buying back its shares in the first place.

The 3.1% dividend yield is interesting in this low-rate environment, but the market is littered with stocks yielding more than JNJ. Johnson & Johnson is based in New Brunswick, New Jersey.

The company’s pharmaceutical sales were $7.69 billion, down 7.4 percent from the prior year, hurt by a 5.9 percent decline in sales of rheumatoid arthritis drug Remicade to $1.61 billion. Finally, Jefferies Group reaffirmed a hold rating and set a $100.00 price objective on shares of Johnson & Johnson in a research note on Thursday, September 10th.

Johnson & Johnson (NYSE:JNJ): On Monday heightened volatility was witnessed in Johnson & Johnson (NYSE:JNJ) which led to swings in the share price. One analyst has rated the stock with a sell rating, seven have issued a hold rating and eight have issued a buy rating to the company’s stock. Its market capitalization is $265.81 billion with the P/E ratio of 16.81.

The diversified health care giant posted third-quarter adjusted earnings of $1.49 per share, down from $1.50 a share in the year-earlier period. Johnson & Johnson has a consensus rating of “Hold” and an average target price of $106.20. The firm’s 50-day moving average is $93.59 and its 200 day moving average is $98.22.

Looking ahead to fiscal 2015, Johnson & Johnson raised its adjusted earnings guidance to a range of $6.15 to $6.20 per share from the prior range of $6.10 to $6.20 per share. The highest estimate sees the stock going to $115 while the lowest has a $100 target. It has led to a roughly 2% reduction in the company’s share count this quarter, and a negligible impact on EPS.

An analyst at Jefferies, Jeffrey Holford said sales for each of NYSE:JNJ’s three businesses, including its biggest segment of prescription medicines, were roughly 2 percent below estimates. The company said its revenue slid 7.4% to $17.10 billion. The company should focus on smaller deals that bring it products to develop, he said-the kind that brought it successful cancer drugs Velcade and Zytiga, Butler added. The Companys subsidiaries operate 146 manufacturing facilities occupying approximately 21.6 million square feet of floor space.