CNBC Host Jim Cramer says one stock is down in value for no valid reason.
In fact, Cramer says the stock is a buy.
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The stock-picking personality made the comments during a discussion with the financial news network's Jeff Marks on Cramer's Morning Take April 18.
"Right now, I have to tell you, I think Johnson & Johnson (JNJ) is wrong to be down," Cramer said. "We can talk about the market, but I think that we've gone over it and we've had, you know, this is a company that we have a very close relationship with and I'll say it only like that. But it is true, Jeff, that there are people that are selling the stock and they don’t know what they’re doing."
Marks remarked on how Johnson & Johnson beat many investors' expectations when it announced first quarter earnings during a call April 18.
"And it looked pretty good this morning," Marks said. "I mean, as it should have, right? You had a strong earnings beat, revenue beat, they raised their outlook for the full year. I have beats pretty much across the board. I know vaccine sales might have been one of the drivers but still very strong numbers in pharma, in MedTech, with China coming back and in consumer growth."
"Now, on the conference call there was a comment made. I think this explains perhaps why the stock is down," Marks added. "I don't think it's right that it should be, but they talked about how they've had this $60 billion revenue target for 2025 for the pharma business. The street doesn't believe they'll do $60 (billion). The street is at around $54 (billion)."
Cramer expanded on his comments, remarking on the effect of covid vaccines and the litigation the company has faced about talc over the years. He ultimately called the stock a buy.
The stock was up initially, pre-call. First you hear, all right, well, maybe because they were going to make money due to covid vaccine and now they're not. No. Everyone knew they weren't, That was already disclosed. And then you have people were worried about maybe they said something new on talc. No there was absolutely nothing about talc. They disclosed the litigation, which is what they had to do.
So then you start thinking, well, did they lower guidance on pharma? Well, they did not lower guidance on pharma. Were they conservative about MedTech? Absolutely, because then you talk about how the China inflection is coming right now. Was consumer products not so good? No, consumer products was actually double digit.
They were able to raise price and no degradation of market share. Which then all comes down to the fact that I think that this stock, which is down $4 or $5, may not rally in a given day because there's someone out there who really hates it right now.
But it is a buy.
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