Reuters had an article today saying JNJ knew about the asbestos in its baby talc powder for decades and did not alert authorities.
This issue is not new (JNJ has faced lawsuits for years, 5 appeals are being done by JNJ) so it is surprising to see such a big price move again on this topic (last one was in February).
JNJ is defending itself against this article citing plaintiffs’ attorneys are distorting historical documents and creating confusion on purpose for personal financial gains…
FYI the US FDA study found no asbestos fibers in any of the samples containing talc that were tested.
Bloomberg sees a $10-20B settlement risk for JNJ (sales are currently $81B, net income $22B, FCF $21B) so it is not as negligible as some other sell-side analysts are assuming (for example Wells Fargo sees a $1.5B risk)
[tag JNJ]
Julie S. Praline
Director, Equity Analyst
Direct: 617.226.0025
Fax: 617.523.8118
Crestwood Advisors
One Liberty Square
Suite 500
Boston, MA 02109