Johnson & Johnson (JNJ - Free Report) has accepted a $2.1 billion offer from a private equity firm, Platinum Equity, for the sale of its LifeScan diabetes device unit. The company had announced the receipt of a binding offer from Platinum Equity in March.
The LifeScan unit makes blood glucose monitoring products and generated revenues of $1.5 billion last year.
J&J stock has declined 12.3% this year so far, which compares unfavorably with a decrease of 4% recorded by the industry.
The move was in line with J&J’s strategic plans for its diabetes business. The company has been planning to streamline its non-core assets since last year. As part of the streamlining efforts, J&J had announced the closing of operations at its Animas Corporation diabetes care unit in October last year. The company has arranged a deal with medical device maker, Medtronic, Inc. (MDT - Free Report) for the transition of patients on Animas insulin pump to Medtronic pump. Meanwhile, J&J also received an offer of $2.8 billion from Fortive Corporation (FTV - Free Report) earlier this month for its Advanced Sterilization Products business.
Moreover, sales in J&J’s Diabetes Care franchise declined 9.7% in 2017 to $1.6 billion due to price decline and competitive pressure. Thus, streamlining these assets is likely to boost margins as well cash position of the company.
Zacks Rank
J&J currently carries a Zacks Rank #3 (Hold). Eli Lilly and Company (LLY - Free Report) is a better-ranked large-cap pharma stock, which carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Lilly’s earnings per share estimates moved up from $4.87 to $5.15 for 2018 and from $5.29 to $5.46 for 2019 in the last 60 days. Shares of the company are up 1.3% this year so far.
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Johnson & Johnson (JNJ - Free Report) has accepted a $2.1 billion offer from a private equity firm, Platinum Equity, for the sale of its LifeScan diabetes device unit. The company had announced the receipt of a binding offer from Platinum Equity in March.
The LifeScan unit makes blood glucose monitoring products and generated revenues of $1.5 billion last year.
J&J stock has declined 12.3% this year so far, which compares unfavorably with a decrease of 4% recorded by the industry.
The move was in line with J&J’s strategic plans for its diabetes business. The company has been planning to streamline its non-core assets since last year. As part of the streamlining efforts, J&J had announced the closing of operations at its Animas Corporation diabetes care unit in October last year. The company has arranged a deal with medical device maker, Medtronic, Inc. (MDT - Free Report) for the transition of patients on Animas insulin pump to Medtronic pump. Meanwhile, J&J also received an offer of $2.8 billion from Fortive Corporation (FTV - Free Report) earlier this month for its Advanced Sterilization Products business.
Moreover, sales in J&J’s Diabetes Care franchise declined 9.7% in 2017 to $1.6 billion due to price decline and competitive pressure. Thus, streamlining these assets is likely to boost margins as well cash position of the company.
Zacks Rank
J&J currently carries a Zacks Rank #3 (Hold). Eli Lilly and Company (LLY - Free Report) is a better-ranked large-cap pharma stock, which carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Lilly’s earnings per share estimates moved up from $4.87 to $5.15 for 2018 and from $5.29 to $5.46 for 2019 in the last 60 days. Shares of the company are up 1.3% this year so far.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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