Over the last 12 months, J&J's stock has increased 1.9 percent, while the S&P 500 has increased 2.4 percent.
SinceGoldman Sachsinitially added J&J to its "buy" list on May 11, 2011, there have been two important changes, the investment bank said.
First, Goldman's analysts said one of J&J's new drugs, Xarelto, will be a much smaller drug than they had originally thought.
In addition, Goldman continues to see risk to a continued slowdown in the medical devices and diagnostics division. The bank's analysts recently reduced its outlook for the division to show no recovery in volume trend in 2012.
"Our estimates already reflect these new risks and we continue to see a total return of 19 percent over the next 12 months, albeit lower than our 'buy'-rated Pharma names," analysts said.
The investment bank added that it forecast a total return of 22 percent for Bristol Myers, which it also upgraded to a 'buy' rating.
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Goldman Sachs is acting as financial advisor to Johnson & Johnson in an announced strategic transaction.