BMO Capital Remains Bullish on Mead Johnson (MJN) Following 2Q Report

BMO Capital reiterated an Outperform rating with a $97.00 price target on Mead Johnson Nutrition (NYSE: MJN) following the company's 2Q earnings report. MJN reported EPS of $0.88, above $0.81 estimates. The company reiterated EPS guidance of $3.48-3.60.

Analyst Amit Sharma commented, "MJN reported 2Q16 adjusted EPS of $0.88, $0.07 above our estimate, as weaker-than-expected sales were more than offset by nearly 300bp of EBIT margin expansion and a lower-than-expected tax rate (+$0.05). Consolidated FX-neutral sales declined by 4% (Asia: -7%; LatAm: -3%; NA: flat) as new testing of fully imported products slowed sales/shipments in China, while higher trade spending to support the launch of Enfinitas in China penalized sales by nearly 260bp. MJN raised its three-year cost savings program by $60mm to $180mm, including incremental $15-20mm in 2016 (vs. previous target of $60mm). MJN reduced its FX-neutral sales guidance to flat to -2%, while maintaining EPS guidance of $3.48-3.60, owing to higher gross margins, greater cost savings, tax benefit ($0.05), and lower FX headwinds ($0.35 vs. previous guidance of $0.40)."

For an analyst ratings summary and ratings history on Mead Johnson Nutrition click here. For more ratings news on Mead Johnson Nutrition click here.

Shares of Mead Johnson Nutrition closed at $89.89 yesterday.

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