Pharmaceutical giant Johnson & Johnson (JNJ) is planning to sell its stroke care business called “Cerenovus” for $1 billion or more.
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The Financial Times is reporting that the sale is part of Johnson & Johnson’s ongoing efforts to restructure its medical technology division. The company is seeking a valuation of between $1 billion and $1.5 billion for the Cerenovus sale.
Cerenovus makes surgical equipment for use on medical patients who have suffered a stroke. The business unit has reportedly been presented to potential private equity and strategic buyers by senior management of Johnson & Johnson. It’s not clear how much interest, if any, there has been from potential buyers.
Internal Restructuring
The sale of Cerenovus comes as Johnson & Johnson undertakes a multi-year internal restructuring following the Covid-19 pandemic. Over the last three years, the pharma giant has spent more than $30 billion to acquire several medical device makers.
At the same time, the company has determined that it would be prudent to offload the Cerenovus surgical equipment business as part of its restructuring. Johnson & Johnson has struggled as sales of the company’s Covid-19 treatments has waned.
JNJ stock has risen only 2% over the last 12 months, underperforming the broader market.
Is JNJ Stock a Buy?
The stock of Johnson & Johnson has a consensus Moderate Buy rating among 14 Wall Street analysts. That rating is based on six Buy and eight Hold recommendations issued in the last three months. The average JNJ price target of $167.50 implies 7.18% upside from current levels.
