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) --

Johnson & Johnson

(JNJ) - Get Johnson & Johnson (JNJ) Report

got a nod of approval from

Goldman Sachs

(GS) - Get Goldman Sachs Group, Inc. (GS) Report

Wednesday when the firm added the consumer- and medical-products company to its conviction buy list.

J&J beat profit and sales expectations in its recent quarter despite

consumer product recalls.

On Wednesday, Goldman analyst Jami Rubin noted that "after a long track record of robust and steady sales and earnings growth, JNJ experienced headwinds and missteps in each of its three businesses, breaking the 'promise' that diversification would provide earnings stability."

"Now, we see a potential turning point for JNJ to resume its prior path after a temporary stumble. Most importantly, we see an evolving new product story in its Pharma division: primarily specialty-focused drugs, with blockbuster potential, driving operating margin expansion due to the mix shift to specialty-focused revenues. We expect JNJ's earnings to return to 9-10% growth over the next three years (after 2-3% in past two years) - the only accelerating earnings story across global Pharma in next three years."

Goldman's sentiment pushed J&J shares 1.2% higher Wednesday amid heavier-than-normal trading. Around 7.3 million shares changed hands less than two hours into the trading session, compared with their average daily volume of 12.9 million.

On Monday, Goldman added


TheStreet Recommends

(PEP) - Get PepsiCo, Inc. Report

to its elusive conviction buy list, after the beverage and snack maker beat profit expectations last motn and reaffirmed its outlook despite what it called "high

global commodity cost inflation."

Goldman expects PepsiCo to show improvement in its North American operations.

The firm noted this week that "we are adding shares of PepsiCo to the Americas' Conviction Buy List with our 12-month $83 price target. This action is in conjunction with our removal of

Mead Johnson


from the Conviction List. Bottom line--we see more than 20% total return potential in this high quality Staples name as North American beverage volumes stabilize, modest pricing and cost synergies drive 10% EPS growth, plus a multiple re-rating close to its historical norm."

Similarly, analysts at Credit Suisse upgraded PepsiCo to a buy rating on Friday.

Elsewhere in consumer stocks, Goldman analysts raised their price target on


(CL) - Get Colgate-Palmolive Company Report

in late April.

The firm boosted their estimates on Colgate-Palmolive through 2013, noting that the company is seeing better currency and pricing trends.  

Goldman set a $91 price target on Colgate-Palmolive.

Also in late April, Goldman reiterated its conviction-list buy rating on


(AAPL) - Get Apple Inc. (AAPL) Report

shares following the

iPhone maker's steal second-quarter earnings report.

Goldman raised its forecasts and 12-month price target on Apple to $470 from $450.

"Strong iPhone shipments of 18.65 million versus our forecast of 14.77 million was the key source of upside," said Goldman's analysts, in an April 21 research note. "IPad units came in below expectations, due to supply constraints that are now easing."

-- Written by Miriam Marcus Reimer in New York.

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Miriam Reimer


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