Johnson & Johnson’s Solid Quarter, Smithfield Parent Plans Hong Kong IPO, and 3 More Hot Stocks

Johnson & Johnson (NYSE:JNJ): The company reported earnings per share for the second quarter of $1.48, beating analyst projections by 9 cents, and revenues of $17.88 billion, beating estimates by $0.17 billion. Sales were greatly helped by the acquisition of Synthes, whose integration continues to be successful. By division, the consumer unit  grew 1.1 percent to $3.7 billion, global pharmaceuticals rose 12 percent to $7 billion, and medical devices and diagnostics — the company’s biggest unit — rose 9.6 percent to $7.19 billion.

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Smithfield Foods (NYSE:SFD): Shuanghui International, the Chinese firm that spent $4.7 billion on Smithfield, is planning to launch an initial public offering in Hong Kong following the purchase, according to Reuters. Hong Kong offers a larger and far more diverse market than Shenzhen, where Shuanghui is currently listed. The move would also provide an exit route for Shuanghui’s private equity stakeholders, including Goldman Sachs.

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Goldman Sachs (NYSE:GS): Second-quarter earnings per share has weighed in at $3.70, beating by 89 cents. Revenue of $8.61 billion was enough to beat by $0.35 billion, though shares are slumping nearly 2 percent in trading. Antoine Gara says that the beat is a low-quality one, due largely to the $1.42 billion in revenue posted from rising marks on the bank’s private equity investments and securities portfolio. Trading revenue of $2.46 billion, up 12 percent year-over-year, experienced “favorable” conditions for most of the quarter, though they became “more challenging” toward the end.

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Tesla Motors (NASDAQ:TSLA): Northland Securities’s bullish price target of $230 isn’t swaying Patrick Archambault at Goldman Sachs, who believes that the bull scenario involves a 3.5 percent global market share in the entry and mid-luxury categories, equating to 200,000 units sold with a 15.2 percent operating margin, yielding a per share value of $113. In a worst-case scenario, Goldman sees the shares at $58.

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Telecom Italia S.P.A. (NYSE:TI): The suspension of plans to spin off its fixed-line copper network has sent shares down over 3.7 percent, as the country’s telecom operator, AGCOM, proposed the lowering of fee rivals’ pay to gain access to the network last week. AGCOM’s decision creates “uncertainties” that could affect the feasibility of the spin-off, the company says, adding that the cut rate would affect its future investment decisions and have an “economic-financial impact” of around 110 million euros ($143.9 million).

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