Drugmaker Johnson & Johnson (JNJ) announced that it has reached a settlement with the State of New York and its subdivisions, Nassau County and Suffolk County, to settle opioid-related claims for $263 million.
With this, the company has dodged the jury trial scheduled for June 28. Several big opioid makers and distributors, including AbbVie (ABBV) and Teva Pharmaceutical Industries (TEVA), are also the defendants in the case.
The company said it discontinued all its prescription pain medications in 2020. Despite the penalty, Johnson & Johnson did not admit to any liability or wrongdoing.
JNJ’s Janssen Pharmaceuticals developed two prescription opioid medicines to help patients combat pain. Notably, these products are no longer sold in the U.S. by the company. (See Johnson & Johnson stock chart on TipRanks)
Following the settlement announcement, Cantor Fitzgerald analyst Louise Chen reiterated a Buy rating on the stock with a $200 price target. This implies 21% upside potential.
Fitzgerald is of the opinion that the settlement will help the company clear an overhang on its shares and increase focus on commercial products and the pipeline.
The stock has a Strong Buy consensus rating based on 6 unanimous Buys. The average Johnson & Johnson price target of $191 implies 16.3% upside potential from current levels.
According to TipRanks’ Smart Score system, Johnson & Johnson gets a 9 out of 10, which indicates that the stock has the potential to outperform market expectations.
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