Johnson & Johnson shares decline on downgrade

NEW YORK - Shares in Johnson & Johnson fell 4.1 percent Wednesday after JPMorgan downgraded the stock, saying it is overvalued.

The stock slid $2.66 to close at $61.53. In the past year, it has ranged from $52.06 to $72.76.

Analyst Michael Weinstein cut his rating to "Neutral" from "Overweight." He said the stock is trading at a premium of more than 25 percent versus an evaluation of the value of the "sum of its parts."

That makes it a good time to stop accumulating shares, since historically they have underperformed the Standard & Poor's 500 index when that premium has been more than 5 percent, he wrote.

Weinstein said the stock has only once before traded at a premium of 15 percent to that metric, which attempts to put a value on each division.

He said J&J does deserve to be more expensive than its peers because its pipeline of products is deeper and growth is likely to be higher. But he said that premium is now "hyperbolic."

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