Reuters: Global Markets: Mead Johnson shares fall on concern over China slowdown

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Mead Johnson shares fall on concern over China slowdown Jul 16th 2012, 15:14 Mon Jul 16, 2012 11:14am EDT (Reuters) - Shares of Mead Johnson Nutrition Co (MJN.N), maker of Enfamil baby formula, fell nearly 4 percent on Monday after two analysts lowered their price targets on the stock due to concerns about slowing growth in China, the company's biggest and most important market. RBC Capital Markets analyst Edward Aaron also downgraded the stock to "sector perform" from "outperform," citing a lack of clarity of the magnitude of a slowdown in China. "Accurately assessing the rate of deceleration is exceedingly difficult coming off a period of such extraordinary growth," Aaron said, noting that last year, Mead Johnson's sales in China and Hong Kong grew 45 percent and accounted for two-thirds of the company's sales growth. "Sentiment is in the process of shifting from denial to acceptance of a China slowdown," Aaron added. JP Morgan analyst Ken Goldman lowered his price target and earnings estimates for Mead Johnson, though he stood by his "overweight" rating. Goldman said he spoke today to a rival of Mead Johnson in China that confirmed that the infant formula category is slowing there. "We think it is prudent, given the number of companies reporting sluggish sales in China lately, to take a more circumspect view about the near term," Goldman said. Mead Johnson shares fell $3.02, or 3.9 percent, to $74 on the New York Stock Exchange. (Reporting By Martinne Geller in New York, editing by Dave Zimmerman) Link this Share this Digg this Email Reprints

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