JNJ Facing a 'Tough Period': Medical Tech Analyst

Dow component Johnson & Johnson—the first major health care company to report earnings this quarter—posted weaker-than-expected quarterly revenueon Tuesday. While the profit topped Wall Street’s forecasts, it was mainly due to cost cuts and lower taxes.

Mike Weinstein, managing director and senior medical technology analyst at JPMorgan shared his analysis.

“They’re in a tough period right now,” Weinstein told CNBC.

“JNJ is going through a period in which they’ve had a couple of large products go generic and on top of it, they’re feeling the impact from the economy, which is impacting not only the pharmaceutical business but also the consumer and medical devices business.”

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Weinstein has a “neutral” rating on Johnson & Johnson.

“The fundamentals right now aren’t there,” he said. “[JNJ’s] going to have to look out beyond the near-term and think more about the longer-term pipeline of the company. There are also concerns out there about health care reform and medical devices excise tax.”

Weinstein also said the health care giant's key brands have seen deceleration in the past few quarters, but consumers will eventually come back in 2010.

What Experts are Saying:

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Johnson & Johnson Competes With:

Eli Lilly


Procter & Gamble

Intuitive Surgical


Weinstein has an investment banking client who owns shares of JNJ. Additionally, a senior executive of JP Morgan is a director at JNJ.