What Happened?
Shares of multinational healthcare company Johnson & Johnson (NYSE: JNJ) fell 5.6% in the morning session after a judge in Texas rejected the company's third attempt to use bankruptcy as a legal shield against lawsuits alleging its talcum powder products caused ovarian cancer.
The ruling was a major setback for JNJ, which sought to limit its financial exposure by shifting the blame to a subsidiary and declaring it bankrupt. The judge's decision increased the risk of substantial legal penalties and potential settlement payouts, which could negatively affect JNJ's financial outlook.
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What The Market Is Telling Us
Johnson & Johnson’s shares are not very volatile and have had no moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
Johnson & Johnson is up 9% since the beginning of the year, and at $157.01 per share, it is trading close to its 52-week high of $167.70 from March 2025. Investors who bought $1,000 worth of Johnson & Johnson’s shares 5 years ago would now be looking at an investment worth $1,219.
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