Johnson & Johnson (JNJ) – Get Free Report shares edged lower Thursday after the group unveiled plans to list its consumer healthcare division as a stand-alone company with around $15 billion in annual sales.
Johnson & Johnson, which first unveiled the spin-off plans in November of 2021, will list the consumer healthcare division, now known as Kenvue, on the New York Stock Exchange under the ticker symbol KVUE. The new group will include brands such as Band-Aid, Baby Powder, Listerine, Neutrogena and Tylenol.
Kenvue’s sales for the nine months ending in October were around $11 billion, Johnson & Johnson said, with net income of around $1.7 billion.
The group’s pharmaceutical and medical devices division, which recently purchased heart pump specialists Abiomed (ABMD) – Get Free Report for around $16.6 billion, recorded sales of around $80 billion in 2021, according to Securities and Exchange Commission filings.
“We are well positioned to capitalize on this large market opportunity through our holistic approach to delivering consumer health solutions,” Johnson & Johnson said in the SEC filing. “Our portfolio of brands is widely recognized and represents a combination of global and regional brands, many of which hold leading positions in their respective categories. Ten of our brands had over $400 million in net sales in 2021, and we currently hold five #1 brand positions across major categories globally, in addition to many #1 brand positions locally across our four regions.”
Johnson & Johnson shares were marked 0.1% lower in pre-market trading to indicate an opening bell price of $180.00 each.
Johnson & Johnson’s dividend will remain “at least at the same level” following the separation, the company said when it first published plans for the consumer healthcare split in 2021. Earlier this week, the group said it would pay a first quarter dividend of $1.13 per share on February 17, the same payout it made in October, July and April.
Moody’s Investors Service, however, has warned that Johnson & Johnson may lose its coveted triple-A credit rating after the spin-off, given that liabilities tied to court rulings on talc product liability, which are likely to remain with the consumer health group, would also “represent an overhang to J&J’s otherwise excellent credit quality.”
Johnson & Johnson will publish its fourth quarter earnings on January 24, with analyst looking for an adjusted bottom line of $2.23 per share on revenues of around $23.8 billion.
Last fall, the company lifted its 2022 earnings forecast by around 5 cents per share, to between $10.70 and $10.75 per share, with adjusted operational sales growth of between 6.7% and 7.2%.
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