Summary
JNJ continues to face escalating liability risk due to talc cancer lawsuits.
The authorized $5 billion share buyback reduces confidence in the stock.
Even after the selloff, the stock isn't appealing at 15x forward EPS estimates with the liability risk overhang and potential brand damage.
In the middle of a crisis, Johnson & Johnson (JNJ) authorized a headline-grabbing stock buyback. The amount actually suggests that the talc lawsuits might have a bigger financial impact than originally thought. My consistent investment thesis remains intact that the stock should be avoided on this liability risk even after the stock dips nearly $20.
Image Source: JNJ website
