The actions of Johnson & Johnson this Friday they rise 1 percent in Wall Street after announcing that he plans to split his business.
The company wants to carry out the spin-off of its consumer division, which generated $ 14 billion in 2020, from the pharmaceutical company and form two separate publicly traded companies.
According to the US group, the division will last between 18 and 24 months.
Will keep the dividend
“It’s the best way to accelerate our efforts to serve consumers and create opportunities for our global team,” he explains. Alex Gorsky, CEO of J&J.
“The planned spin-off is surprising for a company that has long supported the benefits of a three-division model,” say analysts at Bloomberg Intelligence.
“But, if now is the time to split, the question arises as to why J&J is holding out with a less traditional than consumer combination of pharmaceutical services,” they detail.
“This business, which includes talc, subject to significant lawsuits, could be followed by a division of Devices,” they anticipate in Bloomberg Intelligence.
The company assures that it will maintain the dividend, which in the last quarter offered a yield of 2.58 percent, in line with what it has been offering in the latest results presented this year.
The spin-off will also be one of the last big moves that Gorsky will take, who will be replaced in January by the company’s executive vice president, Joaquín Duato.
J&J, in line with the ‘farmas’
Johnson & Johnson thus follows in the wake of spin-offs of the large pharmaceutical companies in the sector.
For example, from Pfizer, one of the protagonists against Covid-19, and GSK, who joined forces in a company through their consumer units that they plan to spin off in mid-2022.
In addition to investors, Johnson & Johnson’s move is so far well received by analysts.
Several firms reviewed after hearing the news their position on the shares, which accumulate a rise of 5 percent this year. The securities are now trading at around $ 165.
The investment bank Wells Fargo He took advantage of this Friday to reiterate his buy recommendation on the shares, which he gives a target price of $ 190.
Others like the broker Cantor Fitzgerald they raised their target price to $ 215, yielding a 25 percent upside potential. The rating agency Morningstar, for its part, kept on retaining its recommendation although it barely sees a trip in the stock market for J&J, by indicating a target price of $ 167.
The consensus consulted by finance.com estimates that the securities have a 12 percent revaluation potential that would take them to $ 185. The value also has 57 percent of purchase recommendations.