Money managers pick lawsuit-besieged J&J as most respected brand in annual Barron’s poll

JNJ's World HQ

Barron’s annual list of the most respected global companies came out last weekm and at the top for the first time ever was Johnson & Johnson. It came in just ahead of Berkshire Hathaway at No. 2 and a falling Apple at No. 3, dropped from the top spot in 2015.

That’s likely welcome news for the beleaguered J&J, which has been in the media more often lately for talcum-powder lawsuits that allege the company knew about a connection to ovarian cancer. More than 1,000 suits have reportedly been filed, but already this year in two St. Louis cases, juries awarded damages of $55 million and $72 million to ovarian cancer patients and their families, saying J&J failed to adequately warn women of the danger.

The respect ranking disconnect may be in part because the Barron’s poll is not a consumer ranking. Barron’s asks professional investors, not consumers, for their opinions in determining the top global brands. J&J’s adeptness at handling problems in the past wins it favor with investors, in fact, Barron’s reported, noting “The company’s deft handling of a recall of its Tylenol pain reliever after a cyanide-tampering scare still inspires, even though the episode occurred more than 30 years ago.” And the company did weather a slew of litigation over its Risperdal antipsychotic, too.

The reasons why money managers might respect a brand are different from why consumers might feel the same way. The top reason for the money managers' respect was strong management (30%), followed by ethical business practices (25%) and sound business strategies (19%).

Meanwhile, among consumers, the J&J parent brand is at an all-time low according to a recent YouGov BrandIndex survey reported in Mediapost’s Marketing Daily. Since early February, J&J’s perception levels have dropped by two-thirds, although two of its most important brands, Band-Aid and Tylenol were less affected. Band-Aid increased 18% and Tylenol dropped 13%.

Mediapost quoted YouGov BrandIndex CEO Ted Marzilli as saying,“The parent brand will survive and likely thrive. But the baby powder brand might never recover.”

Another reason J&J fared well in the investors’ survey is diminished admiration for some of last year’s top performers, including Walt Disney, Google’s parent Alphabet, and Visa, Barron’s reported.

The article also noted healthcare companies failed to repeat its sector trend of high regard in 2015 when 13 of the top 30 spots were pharma, biotech, medical device makers or pharmacy benefit managers.

“Health-care stocks are down 8% as a group since last July, after many years of leading the market. That decline, which dented investors’ wallets, is likely to have had a negative impact on respect scores, too,” Barron’s said.

- read Barron’s article (sub. req.)
- see Mediapost article

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