Health care company Johnson & Johnson got a ratings upgrade to "neutral."

Catherine Arnold, senior pharmaceuticals analyst at Credit Suisse, told “Closing Bell” why her firm lifted the company from underperform -- but is still holding off from an "overperform" rating.

“Growth expectations were overstated for J&J in regards to two of its key franchises: schizophrenia and anemia,” said Arnold.

But, she added, “We think that recently, investor expectations have become more realistic on those two. So we feel more comfortable that there’s less risk to the downside on Johnson & Johnson.”

“If you think in terms of free cash flow they’re strong,” said Arnold. “If you think about debt load, they’re very attractive. But it’s the growth issue that prevents us from having a more bullish point of view on this stock.”

She recommended Schering Plough as one of her favorite picks.