J&J Analysis: Dow Earnings

BOSTON ( TheStreet) -- Johnson & Johnson ( JNJ) has reported quarterly results.

Quarterly Synopsis: Johnson & Johnson's fourth-quarter sales declined 5.5% to less than $16 billion, with domestic sales down 8.1% and international sales down 3.1%, in part due to currency effects. J&J posted GAAP net income of $1.9 billion, or 70 cents a share, hurt by $922 million of charges related to litigation and recall expenses for the DePuy ASR Hip. Management referred to 2010 and the fourth quarter, specifically, as challenging, despite marginal adjusted earnings growth. It forecast $4.80 to $4.90 of adjusted earnings in 2011, giving the stock a forward earnings multiple of roughly 13, a reasonable valuation relative to peers.

Earnings Performance: J&J's adjusted quarterly profit of $1.03, representing 1% year-over-year growth, narrowly missed analysts' consensus earnings estimate by 0.3%. By comparison, J&J has an average earnings beat rate of 3.3%. It exceeded the consensus earnings target in the 10 previous quarters. J&J's sales tally missed researchers target by 2.3%. It had missed sales targets in the three previous quarters, as well. J&J's stock tumbled as much as 2.3% in response to the quarterly report, which was considered a disappointment. It is down 3.8% in 12 months.

Dividend Information: J&J pays a quarterly dividend of 54 cents, converting to an annual yield of 3.5%, eighth highest in the Dow. The company has grown its distribution 9.3% in the past 12 months and 9.2% and 11%, annually, on average, over three- and five-year spans.

Analyst Opinions: Currently, 12, or 48%, of the analysts covering J&J rate its stock "buy" and 13 rate it "hold." None rank it "sell." The stock has a median price target of $65.60.

UBS, Buy, $69 Target
Citigroup, Buy, $69 Target
JPMorgan, Neutral, $69 Target
Credit Suisse, Neutral, $65 Target
Goldman Sachs, Neutral $59 Target
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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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