'The stock reaction is not supported by science': Here's what Wall Street is saying about the safety concerns involving Johnson & Johnson's baby powder

CFRA Research analyst Colin Sarcola downgraded Johnson & Johnson's stock on Friday to "hold" from "buy," writing in a note that he no longer finds the shares attractive at current levels given the elevated risk surrounding the brand.

The analyst wrote that while the company denies the report's claims, he expects "significant damage will unfold for JNJ's valuable brand name in consumer products and medical devices, which has been built over decades."

Sarcola, who also slashed his 12-month price target on the stock to $134 from $164, said the brand name and its consumer trust are "critical" for its success.

"We see today's news potentially impacting sales of everything from baby shampoo to prosthetic hips."

BMO Capital Markets analyst Joanne Wuensch wrote that the stock's initial move appeared to be an overreaction.

"The health care industry is litigious, and we never pretend to be lawyers, but it is not surprising that an article from Reuters outlining years of potential knowledge regarding the perils of talc should agitate investors," she said. "Further, in a difficult stock market JNJ as a 'safe haven' investment may appear not-so-safe."

The analyst added: "In our opinion litigation overhangs are real, and we do not minimize the situation, but the stock pull back does seem over done to us."

Wuensch carries an "outperform" rating on the stock, with a bullish $154 per share price target.

Cowen analysts Dr. Joshua Jennings and Harris Iqbal wrote in a note to clients on Friday that the sell-off was likely a knee-jerk reaction.

"Although challenging to pinpoint a conclusive range of potential lawsuit settlement amounts, our high-level analysis suggests the move in shares today to be overdone," the analysts wrote.

Cowen currently has an "outperform" rating on the stock with a bullish price target of $155.

UBS analyst Carter Gould wrote in a client note on Friday that these renewed safety concerns come at a particularly inopportune time for the company.

"While we view today's move as overdone (given the implied number of settlements / payouts), this clearly brings these talc bases back to the forefront as an overhang just as the company had been gaining some momentum in winning / dismissing these cases," he said.

Gould currently rates Johnson & Johnson as "buy" with a 12-month price target of $154.