Consensus rating for Mead Johnson
As of May 4, 2016, Mead Johnson (MJN) was trading at $84.87. In this part of the series, we’ll see what Wall Street analysts recommended for Mead Johnson after its earnings release. We’ll also see what the assigned price target is for Mead Johnson over the next 12 months. The ratings remain the same. Approximately 38% of the analysts still rate Mead Johnson a “buy,” 50% rate it a “hold,” and 12% rate it a “sell.”
Analysts’ target prices for Mead Johnson
The average broker target price for Mead Johnson increased to $88.8 from $84.36. This is 4.4% higher than the closing price of $84.87 on May 4, 2016. Kellogg (K), Flowers Foods (FLO), and Campbell Soup (CPB) have average broker target prices of $78.06, $19.00, and $61.39, respectively. These figures imply returns of ~1.3%, -0.89%, and -1.6%, respectively, in the next 12 months. 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 Consumer Staples Select Sector SPDR Fund (XLP) invests 1.2% in Kellogg.
Mead Johnson’s individual recommendations
As for individual recommendations, Credit Suisse and Societe Generale gave Mead Johnson the highest target price of $100. This is ~15% higher than the closing price of $84.87 on May 4, 2016.
On March 16, 2016, Robert Moskow of Credit Suisse upgraded Mead Johnson stock from “neutral” to “outperform.” He increased the target price from $76 to $100 due to the takeover discussion. Moskow said, “With demand growth in emerging markets slowing, one would think that Nestle and Danone’s management teams would take a fresh look making a deal work through cost synergies. Both companies have been active acquirers in the Nutrition space; it is consistent with their strategic direction.”
After the earnings, Societe Generale increased its target price from $85 to $100. Goldman Sachs and BMO Capital Markets also updated their price targets after the earnings release to $91 and $95, respectively. This implies returns of 7% and 11%, respectively, in the next 12 months.
Goldman Sachs rated the stock a “hold.” 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 also updated its target price from $77 to $82. However, it assigned Mead Johnson the lowest target price. It’s ~3.5% lower than the closing price of $84.87 on May 4. William Blair, Wells Fargo Securities, Morningstar, and Gabelli didn’t provide a target price. However, the first two rated Mead Johnson a strong “buy.” The last two rated it a “hold.”