(Reuters) – Healthcare conglomerate Johnson & Johnson (NYSE:) is spinning off its consumer health division that sells Listerine and Baby Powder, to focus on the more-profitable pharmaceutical and medical device market.

Here are some comments from investors and analysts:

JEFF JONAS, ASSET MANAGER, GAMCO INVESTORS

It (spin-off) is a low growth business with lower margins. It’s been difficult since the manufacturing issues. From that point on, it’s been an extremely difficult journey. It didn’t help, and COVID wasn’t effective. Last year’s lack of a cold season didn’t help.

“They have always been able to do a variety of small deals as well as big ones like Actelion. The balance sheet is certainly strong enough to handle any deal. When they finish the consumer spinoff, they will probably borrow a lot and raise some money, giving them the ability to deal with more people.

JOANNE WIENSCH, ANALYST, CITI

Combining them, they will most likely yield a dividend of at least JNJ’s today. The company is also seeking to retain its AAA rating.

We believe that this was due to the pandemic, the increased use of telehealth and other technology-driven products, as well as the growing trend towards personal health and telehealth.

DAMIEN DAMIEN, ANALYST and MORNINGSTAR

We don’t see any significant catalyst to the firm’s move. “The timing of this company’s announcement is quite surprising.” But, it is possible that the threat of future consumer product lawsuits, like the one involving large amounts of Talc settlement, could decrease if consumer division doesn’t have the same level of financial support as the company.

We agree with the management that the dissolution will enable both companies to be more focused and agile, but we do not believe that the existing structure has hindered operational execution.

ASHTYN Evans, ANALYST,EDWARDS JONES

This has been a common practice for pharma companies over the past 12+ years. Innovative drugs are becoming more important to companies.

“But this does come as a surprise, because J&J has been this huge healthcare conglomerate for so long, and the most diversified healthcare company in the world. They are now deciding to put an end to that, at the least from the consumer’s perspective.

S&P GLOBAL RATINGS

We see this as an incremental weakness in the business, due to the decreases diversity and scale. However, this also increases the growth rate of the company and its profitability.

JOSHUA JENNINGS ANALYST COWEN AND CO

“We don’t think JNJ was motivated by the ongoing talc litigation, and we expect investors not to be hostile towards the transaction.”

SHANNON SACCOCIA CHIEF INVESTOR, BOSTON PRIVATE

This is just one example of how to maximize shareholder value by specializing the business. “I don’t believe (talc liabilities were the prevailing factor in this choice.”

“The J&J management has realized that fact that the value that’s been afforded to them by the market is probably not as much as one should expect given the strength and the leadership in those three businesses.”

MOODY’S INVESTOR SERVICE

Announcement is viewed as credit-negative, reflecting “the reduction of scale, diversity, and earnings that will result from this transaction.”

“Moody’s, (NYSE:), will continue to examine the credit implications associated with the separation as further details become available as well as as closer to the transaction date.”