J&J $40B Loss In Market Cap On Talc Report 'Seems Excessive,' Says Wells Fargo

Wells Fargo analyst Lawrence Biegelsen believes Johnson & Johnson shares have been oversold based on today's Reuters article suggesting that the company knew about asbestos in its baby powder for decades but never told the FDA.

He believes any potential settlement should be manageable for J&J, noting that even if all 11,700 talc cases were settled at the highest per case settlement amount among the cases he has tracked, the total liability would be $3.3B.

He estimates that the stock has lost over $40B of its market cap so far, which seems excessive based purely on the potential outcomes of the talc litigation. Biegelsen keeps an Outperform rating on Johnson & Johnson shares.


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