Johnson & Johnson Gets a Downgrade

NEW YORK ( TheStreet) - Johnson & Johnson ( JNJ) was downgraded to hold from buy by TheStreet Ratings on Monday.

"The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins," TheStreet Ratings wrote. "However, as a counter to these strengths, we also find weaknesses including deteriorating net income, weak operating cash flow and disappointing return on equity."

In recent news, Johnson & Johnson's CEO William Weldon received an 8% increase in pay last year. He will be stepping down next month and will be replaced by Alex Gorsky, the company's executive vice chairman.

Johnson & Johnson's price-to-earnings ratio for next year is 11.97 times; the average for pharmaceutical companies is 27.23. For comparison, both Pfizer ( PFE) and Merck ( MRK) have lower forward P/Es of 9.34 and 10.18, respectively.

Sixteen of the 30 analysts who cover Johnson & Johnson rated it buy; 14 analysts gave the stock a hold rating. The stock closed Friday at $65.12 and has ticked down slightly year to date.

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TheStreet Ratings gives Johnson & Johnson a C+ grade and hold rating.