TD Cowen reaffirmed its Buy rating and $185 price target on Johnson & Johnson (NYSE:JNJ) following news that a federal judge rejected the company's latest bankruptcy-based proposal to settle its talc-related lawsuits, which pushed the stock price down more than 5% intra-day today.
According to the report, the court took issue with the voting process tied to the proposed trust structure, which was designed to handle claims outside of traditional litigation channels. While Johnson & Johnson has not yet officially responded to the ruling, an update from the company is expected soon to outline its next legal steps.
Despite the setback, TD Cowen remains confident in the stock’s outlook, pointing to JNJ’s pre-established $11.6 billion reserve for the talc settlement—based on a total nominal value of $13.5 billion. This existing reserve cushions the financial impact and signals that the company has already absorbed much of the potential downside.
The analysts also noted that investors have navigated similar disappointments in two previous failed settlement attempts, suggesting that any near-term weakness in the stock should be modest and short-lived.
With strong fundamentals across its core pharmaceutical and medtech businesses, TD Cowen believes Johnson & Johnson remains well-positioned for long-term performance, even as the talc litigation continues to unfold.
