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Johnson & Johnson Shares Take a Hit Amid Talc Powder Report

We think the pullback in the stock puts the shares near our fair value estimate and think the long-term implications on the price will not be significant after litigation.

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Damien Conover: Johnson & Johnson stock is down close to 10% today, largely on news of a media report that came out that suggested Johnson & Johnson's talc powder might be related to major health issues, most notably cancer. Within the media report, a lot of ideas were floated that there was this link between asbestos and potentially the talc powder.

Now, there's still going to be a lot of cases that will need to come out litigating this, but our general belief is that J&J will litigate these one by one, and really, over a long period of time wear down the defendants, and the outcome will largely be not a significant impact to the valuation. 

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Damien Conover does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.