Johnson & Johnson Talc Claims Pose Rating, ESG Risks, Moody's Says
06 February 2019 - 4:08AM
Dow Jones News
By Colin Kellaher
Lawsuits over the safety of Johnson & Johnson's (JNJ)
signature baby powder pose risks to the company's reputation and
credit profile, Moody's Investors Service said Tuesday.
The rating agency said that while the healthcare company is
financially strong and the lawsuits will take years to resolve, the
potential for the financial impact of the litigation to become
substantial is one of the key risks to J&J's strong credit
profile.
Moody's current rates J&J at "Aaa," its highest rating, with
a stable outlook.
Moody's said allegations that J&J's talcum powder contained
asbestos have weighed on its stock price and could hurt the company
socially.
"Allegations of asbestos in talc are an ESG social risk and
raise the possibility that the company might eventually take steps
to bolster its share price," including large acquisitions or stock
buybacks, Moody's said.
The agency said J&J's financial flexibility, substantial
cash flow and low debt load mitigate the talc-related risk, noting
that no jury awards have yet been upheld in appeals.
Write to Colin Kellaher at colin.kellaher@wsj.com
(END) Dow Jones Newswires
February 05, 2019 11:53 ET (16:53 GMT)
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