Baby Powder Cancer Suits Cloud Johnson And Johnson
Zacks Investment Research | May 03, 2016 05:38AM ET
Fact is, we live in a very litigious society. That’s why you have to sign away your life with wavers just to play a three-on-three tournament at your local rec center. These blood, I mean lawyers, sometimes take on cases just to get their name out there. I mean, right now there’s a lady suing Starbucks (NASDAQ:SBUX) because they put too much ice in her Iced Tea. Hey, lady, did you try asking for easy ice? Maybe the barista likes my beard game a little bit but around here they seem pretty accommodating while hooking up my trenta iced coffee.
Johnson and Johnson (NYSE:JNJ) is elbow deep in legislation right now. In February, JNJ had to shell out $72 million to the family of an Alabama woman who died of ovarian cancer claiming their baby powder and talcum products were to blame. Yesterday, a jury ordered the company to pay $55 million to another plaintiff alleging the products caused her to develop ovarian cancer. The case is one of about 1,200 lawsuits the company is being slapped with because of baby powder.
Say it ain’t so. Baby powder causing cancer? Are you telling me that the tingling sensation I’m getting with Sanofy's (NYSE:SNY) Gold Bond is actually a bad thing? Should I be reconsidering the Bayer (OTC:BAYRY) Dr. Sholls I’ve been using on my feet for years? I can’t keep my closet full of Jordan’s fresh without a little help from Church and Dwight's (NYSE:CHD) Arm and Hammer. Maybe there’s a trend here. Easy on the white powder people. Baby powder, cancer. Sugar, diabetes. Tylenol, liver failure. Excedrin, ulcers. And I haven’t even mentioned the obvious white powders you should be avoiding.
To put the ruling in perspective, $72 million pales in comparison to the $17.9 billion in sales for JNJ last quarter. Analysts really aren’t worried about the lawsuits though. Eleven analysts have increased their earnings estimates for the next year. The bullish attitude has pushed up our Zacks Consensus Estimate from $6.85 to $6.99. The current year consensus has also jumped, moving from $6.50 to $6.59 as ten analysts have increased their earnings estimates. Both of these are big reasons why it’s a Zacks Rank #2 (Buy) right now.
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