Jim Cramer on Johnson & Johnson: "Very Rare Triple-A Balance Sheet"

Johnson & Johnson (NYSE:JNJ) is one of the stocks Jim Cramer commented on. Cramer discussed the stock’s momentum during the episode, as he said:

“As of last night’s close, JNJ was the 10th best performing healthcare stock in the entire S&P 500, up 21.5% for the year. Now, if you’ve been paying attention to this one, that might come as quite a surprise. J&J still has a major litigation overhang, and more important, it’s primarily a pharmaceutical company in a market that hates pharma, or at least we thought it did…

I also think there’s a feeling that at this point, the plaintiff’s lawyers pursuing these cases have overplayed their hand… And by the way, for what it’s worth, I also think that change in administration has helped J&J on this front as well.

President Trump’s not exactly a big fan of lawsuits… but he does seem to be a fan of J&J… So after a couple years where the stock was in purgatory, JNJ is now having a standout year in spite of the overall weakness in healthcare, especially in pharma. They’re defying the broader group because they have the right portfolio with a robust med tech business supplementing the core pharma business and no over-the-counter business to drag them down.

And because J&J’s drug division has proven to be much stronger than expected across several major areas, especially oncology, Wall Street’s no longer fixated on the talc lawsuits or the fact that their number one drug’s now facing generic competition. And look, despite the nice gain to start the year, JNJ still only sells for 16.5 times this year’s earnings estimates, below the market multiple with a nice yield that’s just under 3%. Very rare triple-A balance sheet.

Bottom line here: With so much momentum but still a reasonable valuation, I think JNJ can keep running, maybe for a while. The next target is the company’s early 2022 all-time high of 186 and change within sight, up less than 10 bucks from here. After that, I say it could go through $200.”

Johnson & Johnson (NYSE:JNJ) develops and sells healthcare products spanning pharmaceuticals, medical devices, and vision care. The company provides treatments in immunology, oncology, neuroscience, and cardiovascular diseases, as well as surgical technologies, orthopedics, and contact lenses.

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Disclosure: None. This article is originally published at Insider Monkey.