J&J Names New CEO
The new CEO is likely focused on continuing the industry-leading innovative strategy.
Johnson & Johnson (JNJ) announced on Aug. 19 that Joaquin Duato will replace Alex Gorsky as CEO in early 2022. We don’t expect any change to our fair value estimate or economic moat rating based on the succession plan. The announcement does come a little earlier than we had expected, since Gorsky is only 61 years old; he named family health issues as playing a role in his decision to step down.
Given Duato’s 30-plus years at J&J, including his recently successful strategy work in the drug and consumer divisions, we believe he will continue the industry-leading innovative strategy pursued under Gorsky. Further, we expect continued steady growth based on a diverse group of product lines. However, we don’t expect the extralong tenure typical of a J&J CEO, as Duato is 59 years old. With strong leaders surrounding him, including Jennifer Taubert (head of the drug unit) and Ashley McEvoy (head of the device unit) at the two largest business segments and Joe Wolk as CFO, Duato has a solid support structure for current business operations as well as leading internal candidates for the eventual CEO succession.
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Damien Conover does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.