Johnson & Johnson's (JNJ) decision to spin off its orthopedics business into a standalone company called DePuy Synthes came as a surprise but should boost the company's growth in the longer term, Morgan Stanley said in a note emailed Wednesday.

The analysts said that the plan is aimed at sharpening strategic focus in the company's medical technology portfolio and unlocking value. The separation, expected within 18 to 24 months, would leave Johnson & Johnson's pharmaceutical business accounting for about 70% of total revenue, up from about 65% currently.

The analysts added that the company anticipates that the spin-off will enhance top-line growth and margins. They estimate that without Orthopedics, Johnson & Johnson's medical-technology business could grow at a compound annual growth rate of 6.2% versus 5.2% including Orthopedics, and its total growth rate could rise to 5.2%.

"In response to a question about MedTech separation(s) beyond the orthopedics business, [Johnson & Johnson] indicated there are no immediate plans but acknowledged the possibility of future reviews," the analysts said.

Throughout, the company reaffirmed its commitment to maintaining a strong balance sheet, disciplined capital allocation, continued investment in research and development, dividend growth, strategic acquisitions, and share buybacks, the analysts added.

Morgan Stanley adjusted its price target on Johnson & Johnson to $190 from $178 while maintaining its equal-weight rating.

Price: 191.29, Change: +0.44, Percent Change: +0.23