Johnson & Johnson shares climbed after the company proposed paying $8.9 billion to settle thousands of claims that its baby powder and other talc products caused cancer.
More than 60,000 claimants have committed to support the proposed resolution, which would require approval in bankruptcy court.
On Wall Street, some analysts were also encouraged by J&J’s move despite uncertainty around the final outcome of the proposal.

In this photo illustration a bottle of Johnson & Johnson baby powder is displayed on a table on November 12, 2021 in San Anselmo, California.
Justin Sullivan | Getty Images

Johnson & Johnson shares on Wednesday climbed after the company proposed paying $8.9 billion to settle thousands of claims that its baby powder and other talc products caused cancer. 
More than 60,000 claimants have committed to support the proposed resolution, which would require approval in bankruptcy court, the company announced in a securities filing late Tuesday.

J&J’s stock closed nearly 4.5% higher Wednesday. The company’s market value stands at more than $430 billion.
The pharmaceutical giant also said its subsidiary LTL Management refiled for Chapter 11 bankruptcy protection after its first attempt faced legal challenges. The subsidiary is shouldering tens of thousands of talc lawsuits in a bid to reduce J&J’s losses from litigation and settlement. 
Some lawyers representing plaintiffs in the talc lawsuits called J&J’s proposal a “significant victory” in a legal fight that has lasted more than a decade. 
On Wall Street, some analysts were also encouraged by J&J’s move despite uncertainty around the final outcome of the proposal.
JPMorgan analyst Chris Schott on Thursday called the proposed settlement a positive for the company in a note. He said the bank has viewed ongoing talc headlines as the “larger overhang” for the company compared to an actual settlement value. 

The proposed $8.9 billion settlement is also in-line with JPMorgan’s $8 billion to $10 billion estimate, Schott noted. 
A Thursday note from Morgan Stanley analyst Terence Flynn shared a similar positive take on J&J’s move. But Flynn said he is waiting for clarity on how the 60,000 claimants tie back to the 40,300 plaintiffs cited in J&J’s recent 10-K filing and the roughly 37,500 actions pending on the company’s talc cases. 
It’s also unclear whether the proposed settlement will win approval in bankruptcy court, Bank of America analyst Geoff Meacham noted Thursday. Meacham pointed to J&J’s legal woes over LTL Management’s bankruptcy protection filing. 
A judge affirmed J&J’s ability to use the Chapter 11 strategy in February 2022. But the U.S. Court of Appeals for the 3rd Circuit overturned the ruling in January this year, saying neither LTL nor J&J had a legitimate need for bankruptcy protection because they were not in “financial distress.”
Bernstein Analyst Lee Hambright acknowledged that there are “many issues” to sort through with J&J settling talc liability in bankruptcy court. But he added that the firm believes “this is a creative approach that might actually work.” More

Cooper Neill | Reuters

Sens. Elizabeth Warren and Tina Smith pressed five of the nation’s largest testing labs over delays in processing coronavirus tests as the flu season approaches.
Labs across the country have struggled to keep pace with the rapid rise of coronavirus cases earlier this summer, leading to long lines at testing centers and turnaround times of more than a week for some patients. Billionaire philanthropist Bill Gates said that long turnaround times render coronavirus tests a “complete waste” because it takes so long to get results that people can’t self-isolate once they find out they have the virus.

“Delayed test results and the inability to conduct enough tests seriously weakens the country’s efforts to combat the pandemic. Delays in results can obfuscate public health officials’ view of the virus and how it is spreading, hindering their ability to respond effectively and, in turn, prolonging the pandemic,” the senators wrote in five letters sent Wednesday to the nation’s biggest lab companies. The letters were viewed by CNBC. “While testing numbers and turnaround times have improved in recent weeks, it is imperative we take steps now to prevent future delays and backlogs.”
Public health officials such as Dr. Ashish Jha, professor of global health at Harvard University, have echoed Gates’ concerns. A survey run between July 30 and Aug. 10 by CNBC in partnership with Dynata, a global data and survey firm, suggested that almost 40% of Americans at the time had to wait more than three days for their results, rendering them clinically useless, by Jha and others’ definitions.
The Democratic senators expressed concern about testing challenges in states that were hit particularly hard by the virus this summer such as Florida, Texas, Arizona, and California.
“Tens of thousands flocked to testing sites in these states and across the country, and labs and local officials struggled to keep pace,” they wrote. “Public health officials have even been forced to turn away patients from testing sites and re-impose testing restrictions.”
Warren, D-Mass., and Smith, D-Minn., sent letters to Quest Diagnostics, LabCorp, the Mayo Clinic, BioReference Labs and ARUP Labs. In the letters, the senators asked each of the companies to tell them the current turnaround time for coronavirus testing, maximum daily capacity as well as their turnaround time and capacity during July and August.  They also asked the companies to let them know if they’ve faced any shortages in supplies needed to process Covid-19 tests.

Quest, LabCorp and Mayo Clinic confirmed that they received the letter and are reviewing it. Representatives of BioReference Labs and ARUP Labs did not return CNBC’s request for comment.

Testing turnaround time has improved since the peak of the U.S. outbreak. Assistant Secretary for Health Adm. Brett Giroir, who leads the Trump administration’s testing effort, said on Wednesday that the “the turnaround time issue is essentially solved.”  He added that there may be “outliers,” but more than 91% of tests processed by labs tracked by the agency returned results within three days. The mean turnaround time for August so far is 2.43 days, he said.
But the senators said that as flu season settles in and the same labs work double-time to process tests for both flu and Covid-19, it “may again strain labs’ ability to perform and deliver test results in a timely manner.”
“Policymakers and the public need to better understand the reasons for delayed testing results and declining test numbers, and the resources needed to guarantee the timely delivery of results so the nation can continue its work to combat the pandemic and, where the virus is well-controlled, safely reopen,” the senators wrote.
Many public health specialists and epidemiologists have repeatedly said that widespread and rapid testing for the coronavirus is critical to driving the U.S. response. Early testing allows health officials to trace contacts and cut off chains of transmission before they spill over into uncontrolled outbreaks, specialists say.
While coronavirus testing has ramped up considerably since the beginning of the outbreak, it has fallen in recent weeks, as have new cases. United States testing peaked in late July, when the country was averaging about 822,000 tests per day on July 29, according to data from the Covid Tracking Project. Testing has declined since, with the seven-day average of daily tests at 679,000 as of August 25.
Epidemiologists say this drop in testing has made it difficult to know precisely where the virus is spreading and how rapidly. 
As labs begin to test for seasonal influenza, which has some of the same early symptoms as Covid-19, it could create new testing complications, Dr. Michael Mina, a professor of epidemiology at Harvard’s School of Public Health, said. He added that flu tests and currently available Covid-19 tests both depend on “a lot of the exact same instruments.”
— CNBC’s Nate Rattner and Meg Tirrell contributed to this report. More

On Monday, Disney began furloughing workers, temporarily stopping pay to as many as 100,000 workers, according to an estimate by the Financial Times. (Disney won’t comment on the number of furloughs). Over the last few weeks Disney has laid out its plans to impose unpaid leave, first for some non-union employees, then in a subsequent deal […] More

About geopolitics of data, internet incumbents and the perils of online information Source: Business – economist.com More

Target wants to attract grocery shoppers as consumers buy fewer discretionary goods.
The company has tried to stand out by selling its own unique food and beverage items, raising its fresh food standards and appealing to shoppers seeking convenience.
The big-box retailer will report earnings on Wednesday.

About 21% of Target’s annual sales come from the food and beverage category, but its grocery aisles have taken on added importance as shoppers buy fewer discretionary items.
Melissa Repko | CNBC

For many Americans, a trip to Target brings to mind a shopping cart filled with throw pillows, makeup or a cute outfit.
The retailer wants more customers to think of it when checking off the grocery list, too.

Only 21% of Target’s annual sales came from food and beverage in the most recent fiscal year, according to the company’s financial filings. That’s a sharp difference from rival Walmart, which gets nearly 60% of its annual sales from the grocery aisles.
Yet as inflation-wary shoppers watch their budgets and focus on needs instead of wants, grocery has gained importance as a driver of foot traffic. Investors will learn this week if Target could help make up for softer sales of apparel, electronics and home goods by selling more boxes of pasta, gallons of milk and cartons of eggs. The company will report earnings before the bell Wednesday.

Target will post results as the company’s stock has fallen, driven in part by challenging pandemic comparisons and its own inventory missteps. Shares of Target closed Monday at $160.57, down nearly 30% from its 52-week high.
The big-box retailer also hopes by drawing shoppers for essentials like gallons of milk, it can nudge purchases of discretionary items that shoppers otherwise would not have bought.
“It’s actually a gateway to the rest of the store,” Chief Food and Beverage Officer Rick Gomez said in an interview with CNBC. “It drives traffic to the store. It drives traffic to our site. And then while they’re picking up what they need food- and beverage-wise, they’ll browse through the rest of the store and maybe pick up a few things at Ulta [Beauty at Target] or a few things in apparel.”

A ‘Tarzhay’ spin on groceries

On a recent trip to a Minneapolis area grocery store, Gomez surveyed displays of colorful fruits and vegetables. Nearby, shoppers could order freshly sliced turkey at the store’s full deli counter or order a custom birthday cake at a bakery.
The store captures Target’s grocery ambitions, even though it offers a much larger mix of food than many of the retailer’s other stores. The retailer’s stores vary in size and so do its grocery departments.
Since stepping into his food and beverage role a little over two years ago, Gomez has overseen Target’s efforts to raise the quality of the grocery department. He said that began with some tough truths: Customers weren’t satisfied.
“We were doing focus groups and one of our guests said, ‘You know, I know Target sells food and beverage, but it kind of feels like an afterthought. It feels a little bit like a bolt-on. It doesn’t have ‘Tarzhay magic’ that the rest of the store has,” Gomez said.
“It was a little disheartening, but rather than get frustrated and get disappointed about it, we said, ‘You know what, let’s use that as a rallying cry,'” he said.
Target struggled with out-of-stock items in the department, even before the pandemic walloped the supply chain, he said. Fruits and vegetables weren’t always fresh. The grocery department didn’t capture a celebratory or seasonal flair like other parts of the store.
Target can now offer more reliability with a new distribution center in Maryland that opened in October, he said. It hired more employees with grocery expertise and raised its produce specifications to lengthen freshness, improve taste and boost presentation, such as making sure avocados are a consistent size.
He said that Target has added more items to Good & Gather, its primary private label grocery brand that launched in 2019 and to Favorite Day, a line of snacks and desserts that debuted in 2021.
It has riffed off the model of Trader Joe’s by coming up with creative items that can’t be found elsewhere, such as s’mores trail mix and an avocado toast-flavored chopped salad kit. Some items are seasonal, too, like a peach jelly bean-flavored whipped cream for Easter.
Gomez credited those changes and others for fueling sales gains. In each of the past two fiscal years, Target has had double-digit sales growth in the food and beverage category.
The segment’s sales as a percentage of Target’s overall annual revenue has stayed relatively flat, but its total sales have spiked. Food and beverage sales totaled $22.9 billion in the fiscal year that ended in January, up about 52% from $15 billion in the year that ended in late January 2020.
Target’s grocery sales matter more as shoppers pull back in other areas. Company leaders said at an investor meeting in January that the retailer took action to address the budget sensitivity they were seeing from consumers. After its aggressive actions to clear through excess inventory, the company stocked up more on food and essentials.
It had about 13% less inventory in discretionary categories compared with a year ago at the end of the fiscal fourth quarter. Target also said it would offer more items at lower price points, such as $3, $5, $10 and $15.

Grocery competition gets tougher

Competition for grocery shoppers has heated up, especially as consumers stretch their budgets. Discounters like Aldi, Lidl and Dollar General are opening more stores, while warehouse clubs like Costco, BJ’s Wholesale and Walmart-owned Sam’s Club have reeled in more members by offering cheaper gas and bulk sizes. Meanwhile, Kroger wants to get bigger by acquiring Albertsons.

Target is the fourth-largest grocer in the U.S., with 5.3% of market share in 2022, according to market researcher Euromonitor. That data does not include online grocery sales, which Target has grown through curbside pickup and its home delivery service, Shipt.
The retailer doesn’t attract as many shoppers doing a big weekly grocery trip as its rivals, said Michael Lasser, a retail analyst for UBS. Yet he said it caters to convenience by selling clothing and toys, and offers value with its expanded private label brands.
“Target has increased its relevance in grocery over the past several years,” he said. “The shopper can get more of its needs satisfied at Target today versus in the past.”
But leaning too much into grocery is a risk, Lasser said. That department drives lower margins than other categories — plus, its cheap chic spin on home goods, apparel and more is a key part of what draws shoppers to its website and stores.
Karen Short, a retail analyst for Credit Suisse, said as a shopper, she doesn’t buy fresh foods from Target. She said it can’t offer the same freshness of grocers that sell more produce and turn over berries and bagged salads more quickly.
If the company expands its produce selection, however, she added, it risks tossing more into the garbage bin.
“That’s Target’s permanent dilemma,” she said.
But Target’s Gomez said the company does have the velocity for fresh food: “The volume is there. The traffic is there.”
Target has another issue in building its grocery business relative to Walmart, Short added. She said over the past few quarters, Target has lost some of the shoppers and store visits it gained during the pandemic as consumers stressed affordability over convenience. She said it has a perception problem, as some link the retailer’s flair with higher prices.
In the Minneapolis area, prices of staples at Target were nearly in line with a Walmart less than two miles away. On most of those items, such as a dozen eggs, a gallon of milk and a box of pasta, Target was about 5 or 10 cents more, according to a CNBC analysis.
On a trip to a Minneapolis store with CNBC, Gomez mentioned a recent advertising campaign about “affordable joy.” He pointed out simplified displays at the end of aisles, which advertise a single low price for items like boxes of cereal.
Value goes beyond price too, Gomez said.
“When times are tough and you’re paycheck to paycheck, you can’t afford to buy food that nobody eats,” he said. “So it’s really important to us that we offer value which is a good price, but also really good quality.”
It’s unclear if Target’s effort to bill itself as a budget-friendly grocer will resonate with consumers.
Prices are top of mind for Megan Harvey, 29, of New York City. She enjoys visiting Target and belongs to its loyalty program, Circle. Yet she and her boyfriend, Ben Horansky, 29, don’t buy groceries there.
Instead, Harvey said she typically goes to the retailer’s store in her Upper East Side neighborhood to buy beauty items, such as facewash, or home goods like bath towels. On Sunday, for example, she stopped in and bought a pack of razors.
Over the past three months, Harvey said she’s made fewer Target visits to limit the temptation of coming in for two items and leaving with 12. The couple decided where to grocery shop after tracking local grocers’ prices on a spreadsheet.
“Target is just not the first place that jumps to mind when I think of grocery shopping,” Horansky said. But he said he may add it to the price spreadsheet and see how it stacks up.
Correction: Target’s food and beverage sales were $22.9 billion in the fiscal year that ended in January, and $15 billion in the prior year. A previous version of this story misstated those figures. More