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.
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Open real account TRY DEMO Download mobile app Download mobile appAnalysts 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
