NEW YORK (TheStreet) -- Goldman Sachs downgraded Mead Johnson Nutrition (MJN) stock to "neutral" from "buy" on Monday morning.

The firm cited a less optimistic U.S. outlook and international challenges as reasons for the downgrade.

"We continue to view MJN as a high-quality asset but fundamental challenges have mounted," Goldman Sachs said in their analyst note.

The Glenview, IL-based company manufactures, distributes and sells infant formulas and other nutritional products for children.

Shares of Mead Johnson closed down 1.36% to $77.51 on Friday.

Separately, recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:

We rate MEAD JOHNSON NUTRITION CO as a Buy with a ratings score of B-. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its notable return on equity and expanding profit margins. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Food Products industry and the overall market, MEAD JOHNSON NUTRITION CO's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for MEAD JOHNSON NUTRITION CO is rather high; currently it is at 67.04%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 15.87% trails the industry average.
  • MJN, with its decline in revenue, underperformed when compared the industry average of 2.3%. Since the same quarter one year prior, revenues fell by 10.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • MEAD JOHNSON NUTRITION CO's earnings per share declined by 16.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, MEAD JOHNSON NUTRITION CO increased its bottom line by earning $3.54 versus $3.35 in the prior year. For the next year, the market is expecting a contraction of 4.2% in earnings ($3.39 versus $3.54).
  • The debt-to-equity ratio is very high at 5.24 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Even though the debt-to-equity ratio is weak, MJN's quick ratio is somewhat strong at 1.48, demonstrating the ability to handle short-term liquidity needs.
  • You can view the full analysis from the report here: MJN

Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.