Shares of Johnson & Johnson (JNJ) were sinking nearly 2% in afternoon trading on Wednesday after analysts at Goldman Sachs downgraded the multinational consumer products conglomerate to "Sell" from "Neutral" with a $130 price target.
The bearish outlook on JNJ is predicated on pressure weighed on crucial products at the company, combined with a slowdown in growth at its Medical Devices unit, Goldman analyst Jami Rubin wrote in a note obtained by TheFly.
Rubin also contends that added strains on the consumer will result in below average, long-term growth potential at JNJ.
The analyst forecasts JNJ's sales adjusted earnings compound annual growth rate at between 5% and 7% versus the estimate of between 5% and 10% for the large-cap pharmaceutical sector. Consequently, Rubin concludes JNJ's valuation is "stretched" at current levels.
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