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What to Expect from JNJ’s Consumer Healthcare Segment

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The consumer healthcare segment

Johnson & Johnson’s (JNJ) consumer healthcare segment includes baby care, oral care, skin care, over-the-counter products, women’s health, and wound care franchises. The segment is expected to see positive growth in its operational revenues during 4Q16.

The company acquired NeoStrata in April 2016 to strengthen its skin care products portfolio. The company also acquired Vogue International in June 2016 to strengthen the Haircare products portfolio.

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Baby care franchise

The baby care franchise contributes nearly 16% of the segment sales. Baby care revenues are expected to fall due to the consumer shift to premium products.

Over-the-counter franchise

The over-the-counter franchise contributes ~29% of the segment sales, and the key products from this franchise include analgesics, allergy medications including Zyrtec, and respiratory products.

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Skin care franchise

Skin care franchise contributes ~25% of the segment sales. The Aveeno and Neutrogena products are expected to drive the revenues for this franchise in 4Q16.

Oral care franchise

The oral care franchise contributes ~11% of the segment sales. JNJ has added some new products under the Listerine brand and has carried out some marketing campaigns, which will contribute towards the growth of the oral care franchise in 4Q16.

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Women’s health franchise

The women’s health franchise contributes ~9% of the segment sales. New products are expected to drive the growth of this franchise during 4Q16. The currency devaluation in Venezuela will have a negative impact on the revenues for this franchise.

Wound care/others franchise

The wound care franchise contributes ~7% of the segment sales. The revenues for this franchise are expected to remain flat for 4Q16.

Investors can consider ETFs like the Fidelity MSCI Healthcare Index ETF (FHLC), which holds 10.0% of its total assets in JNJ, 6.4% in Pfizer (PFE), 3.2% in AbbVie (ABBV), and 3.2% in Gilead Sciences (GILD).

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