Johnson & Johnson: Bankruptcy Court’s Talc Ruling Likely Extends Litigation But No Fair Value Impact

Johnson & Johnson plans to appeal the bankruptcy court's rejection of the proposed $8.9 billion settlement regarding the talc cancer claims. While the pathway forward with close to 100,000 talc claimants is now less clear, we believe the total cost of resolving these claims is likely still close to the $8.9 billion established in the proposed settlement and already factored into our valuation. As a result, we don't expect any major changes to the firm's fair value estimate or wide moat rating.