How Did Mead Johnson’s Stock React to the Fiscal 4Q15 Results?



Stock price performance

Mead Johnson (MJN) reported its results for the fourth quarter and the year ended December 31, 2015, on January 28, 2016. The stock rose 3% with the earnings beating estimates and revenue in line with estimates. So far, Mead Johnson fell by ~10% in 2016 as of January 28, closing at $70.2 on the day.

The stock rose by ~5.5% after Mead Johnson announced its financial results for the third quarter and nine months ending September 30, 2015. It closed at $79.3 on the same day. Since then, the stock had started rising. It traded at $79–$84 in October 2015. However, it began to fall in the last two months. In particular, the stock fell by 4% in the last two months.

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On January 8, 2016, Crédit Agricole downgraded Mead Johnson from “outperform” to “underperform.” The stock fell by 3.3% on that day, then fell by 3.4% on January 11 after J.P. Morgan downgraded it from “overweight” to “neutral” and lowered the price target. On January 12, Nomura also downgraded the stock from “buy” to “neutral,” and the stock price fell by 2%.

The shares had their worst performance in 2015, falling by 21%. The price movement is -11.1% on a year-to-date basis, and it’s trading at 3.8% on a trailing-five-day basis.

Peers in the industry

Mead Johnson’s peers in the industry include private nutrition companies like Nestle, Danone, and Abbott Nutrition. Its peers in the food and packaging industry include Mondelez (MDLZ), Flowers Foods (FLO), and General Mills (GIS). They closed at $41.6, $20.0, and $55.2 on January 28, respectively.

Mondelez will be reporting its fiscal 4Q15 results on February 3. Also, Flowers Foods will report its fiscal 4Q15 results on February 11, and General Mills will be reporting its fiscal 3Q16 results in March 2016. The First Trust Capital Strength ETF (FTCS) invests 2.0% of its portfolio in Mead Johnson stock. The Vanguard Consumer Staples ETF (VDC) invests 1.9% in General Mills and 3.8% in Mondelez.

Series overview

In the next parts of the series, we’ll talk about the moving averages of Mead Johnson and its peers. We’ll also go over Mead Johnson’s performance in its fourth quarter and fiscal 2015, as well as its geographic segment contribution. Finally, we’ll look into analyst recommendations for the stock after the earnings release and its guidance for fiscal 2016.


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