JNJ Stock Stumbles on Asbestos Verdict

Johnson & Johnson options traders have grown increasingly bearish

by Lillian Currens

Published on Mar 14, 2019 at 9:58 AM

The shares of Johnson & Johnson (NYSE:JNJ) are down 0.9% at $138.16 in early trading, after a California jury awarded $29 million to a woman who claimed that the asbestos in the company's talcum-based powder gave her cancer. The blue chip said it would appeal.

JNJ shares plummeted in mid-December, amid reports the company was aware of asbestos in its baby powder products for years -- an accusation that the company has vehemently denied. The security subsequently bottomed around $122 in late December, but has since rebounded roughly 14%. Today, the security is set to snap its three-day win streak and end beneath its 10-day moving average for the first time in more than a month. 

A slim majority of analysts are leery of Johnson & Johnson. Seven dished out a tepid "hold" rating, while six are still clutching their "buy" or better ratings. What's more, the consensus 12-month price target of $144.71 is right in line with current levels. 

Options traders have been more decisively bearish. JNJ sports a 10-day put/call volume ratio of 1.07 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio sits in the 85th percentile of its annual range, hinting at a healthier-than-usual appetite for these pessimistic positions of late. 

 

 

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