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Johnson & Johnson: Unimpressive Buyback

Summary

Johnson & Johnson approved a $10 billion share repurchase program.

The company reported unimpressive Q3 '15 earnings results.

The stock buyback program is a signal that the company is fairly priced, offering no compelling reason to buy the stock.

Prior to reporting Q3 '15 earnings, Johnson & Johnson (NYSE:JNJ) announced the approval of a $10 billion share repurchase program. The large number is attention grabbing, but several reasons exist to suggest the program offers limited appeal to investors.

The consumer health care products company has traded mostly downward over the last 15 months, making the timing of the buyback positive. The company, though, reported weak Q3 numbers, questioning whether the right value exists for an aggressive buyback.

Declining Results

JNJ reported that Q3 revenues declined a staggering 7.4% and missed analysts' estimates. The numbers, though...


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