As previously reported, Morgan Stanley analyst David Lewis upgraded Johnson & Johnson (JNJ) to Overweight from Equal Weight with a price target of $170, up from $145.

Pharma growth is likely to accelerate in 2020, which historically has lifted the stock's multiple, while its Consumer segment is stabilizing and the Medical Devices & Diagnostics unit has seen "six consecutive quarters of momentum improvement," Lewis tells investors.

The stock also appears to be pricing in "significantly more legal liability" than he sees as probable, Lewis added.

The analyst sees J&J's "defensiveness returning," which he thinks can lead to outperformance in 2020.