Johnson & Johnson is a buy after the company's consumer business spinoff earlier this year, according to RBC Capital Markets.
The firm initiated Johnson & Johnson with an outperform rating and $178 price target, which suggests shares can climb about 14.5% from Wednesday's close.
This separation has "unlocked potential" for Johnson & Johnson going forward, analyst Shagun Singh said.
Singh also said the company's pharma franchise is poised to deliver competitive growth and that its medtech division is on pace to achieve "top-tier growth and profitability."
The analyst added that Johnson & Johnson is trading below its historical multiples despite its improved financial profile since its Kenvue spinoff and that the company has potential upside from further M & A activity.
Persons:
Johnson, Shagun Singh, Singh, —, — CNBC's Michael Bloom
Organizations:
RBC Capital Markets, Johnson, Pharma, company's pharma
Locations:
Wednesday's