Johnson & Johnson (NYSE:JNJ) is about to release earnings results. Consider this bear case scenario as you listen to management discuss earning and future prospects. A key pipeline drug, Xarelto for cardiovascular disease, enters an increasingly competitive market. Several drug companies will launch similar drugs soon. Prepare for a fist fight. Legal action on product recalls for hip and knee replacements coupled with various consumer products will hurt JNJ reputation and cost billions of dollars. Management will need to cope with this massive distraction.
George Gutowski writes from a caveat emptor perspective.