Johnson & Johnson slips after analyst takes dig at device prospects

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Shares of Johnson & Johnson dipped briefly Friday after an analyst took aim at the company's medical device business.

BTIG downgraded the stock from "buy" to "neutral" due to decreased confidence that Johnson & Johnson will be able to execute a large, money-making acquisition of a heart disease device company, analyst Dane Leone wrote in a research note.

Shares fell as low as $113.36 per share in early trading, but closed just 0.6 percent lower at $113.54 a share.

New Jersey-based Johnson & Johnson owns brands like Listerine, Band-Aid, Tylenol and Neutrogena, and has 3 segments: consumer (19 percent of the business), medical devices (36 percent), and pharmaceutical (45 percent). It has seen positive results from the over-the-counter drug market and oncology drugs, Leone wrote, and a cardiovascular medical device could have helped the company diversify.

But as cardiovascular companies like Edwards Lifesciences have grown, it's become less likely that Johnson & Johnson could afford a "transformative" acquisition, according to Leone.

Shares of Johnson & Johnson are up nearly 11 percent this year, while Edwards Lifesciences is up more than 30 percent.

Source: Factset