What Analysts Recommend for Mead Johnson ahead of 2Q16 Results

As of July 15, 2016, Mead Johnson (MJN) was trading at $91.38. In this part of the series, we’ll see what Wall Street analysts have recommended for Mead Johnson before its 2Q16 earnings release. We’ll also see what the assigned price target is for MJN over the next 12 months. Approximately 38% of analysts rate Mead Johnson a “buy,” 56% rate it a “hold,” and 6% rate it a “sell.”

Since its 1Q16 results, the average broker target price for Mead Johnson has increased by 2% to $91.0 from $88.8. The company has already beaten the estimates of a 0.41% rise, as the company closed at $91.38 on July 15.

Mead Johnson’s peers have the following target prices and return potential:

• Kellogg (K) has a target price of $78.20, which surpassed estimates by 10% as of July 15.
• Flowers Foods (FLO) has a target price of $19.0 and a return potential of 1%.
• Campbell Soup (CPB) has a target price of $63.08, which surpassed estimates by 6% as of July 15.

Mead Johnson is part of the Guggenheim S&P Equal Weight Consumer Staples ETF (RHS). RHS invests 2.3% of its portfolio in Mead Johnson and 2.7% in Campbell Soup. The iShares S&P Global Consumer Staples ETF (KXI) invests 0.59% of its holdings in Kellogg.

As for individual recommendations, Société Générale gave Mead Johnson the highest target price of $100. This is 9% higher than the closing price of $91.3 on July 15, 2016. On July 13, Bank of America Merrill Lynch upgraded Mead Johnson’s rating to “neutral” from “underperform.”

On March 16, Credit Suisse had upgraded the stock to “outperform” from “neutral.” It also raised the price from $76 to $100 due to takeover offers. However, on June 30, Credit Suisse reduced the stock’s target price to $96.

Goldman Sachs and BMO Capital Markets also gave optimistic price targets of $96 and $95, respectively. This target implies returns of 5% and 3%, respectively, in the next 12 months. Goldman Sachs rated the stock a “hold,” and BMO Capital Markets gave it a “strong buy.” Others who rated the stock a “strong buy” are William Blair and Wells Fargo Securities.

Susquehanna Financial assigned Mead Johnson the lowest target price of $82. This is ~10% lower than the closing prices of $91.3 on July 15. William Blair, Wells Fargo Securities, Morningstar, First Global Stockbroking, and Gabelli didn’t provide a target price. However, the first two rated Mead Johnson a strong “buy,” and the last three rated it a “hold.”