health
We're exiting our position in a drug stock and initiating a stake in a more attractive rival
We are making a pharmaceutical position swap into Wednesday's relief rally.
TL;DR
- Jim Cramer's Charitable Trust is selling 1,100 shares of Bristol Myers Squibb (BMY) and buying 150 shares of Johnson & Johnson (JNJ).
- The trust views this as a pharmaceutical swap, preferring JNJ's established commercial excellence over BMY's pipeline uncertainties.
- BMY's stock has rallied significantly in the last six months, but faces upcoming patent cliffs and critical pipeline readouts.
- JNJ shows a stronger long-term rally and significant sales in its Innovative Medicines (pharmaceuticals) and MedTech divisions.
- JNJ has strong growth potential in Oncology, Immunology, and Neuroscience, with a robust pipeline including new drugs like Icotyde.
- JNJ is undergoing portfolio transformation, having spun off its consumer-health division (Kenvue) and planning to separate its Orthopaedics business (DePuy Synthes).
- The trust initiated the JNJ position with a price target of $265, anticipating further re-rating of its P/E multiple.
- The legal headwind associated with JNJ's baby powder lawsuits has reportedly begun to fade.