Bank of America Remains Bullish on Kenvue Despite Recent Stock dip
Despite a recent sell-off, Bank of America is maintaining a “Buy” rating for Kenvue (KVUE), the consumer health company behind brands like Tylenol, Band-Aid, Aveeno, adn Neutrogena. analyst Anna Lizzul reaffirmed a $25 price target, indicating a potential 34% upside for investors.
Kenvue shares have declined 12.8% year-to-date and experienced a more than 10% drop on Friday following a Wall Street Journal report. The report indicated that Health and Human Services Secretary Robert F. Kennedy Jr. is expected to release a report this month perhaps linking acetaminophen use (found in Tylenol) during pregnancy to autism.
Though, Lizzul believes the report is unlikely to substantially impact Kenvue’s stock. She pointed to previous scrutiny in 2023 regarding a similar proposed link, noting that the FDA at that time upheld its findings, which did not establish a causal relationship between acetaminophen use during pregnancy and autism Spectrum disorder (ASD) or Attention-Deficit/Hyperactivity Disorder (ADHD). A third-party litigation expert also suggested that establishing causality would require further scientific evidence and consideration of other contributing factors. Kenvue continues to assert that Tylenol is safe when used as directed.
Lizzul highlighted that Kenvue is currently trading at a discount compared to its peers in the household and personal care sector, such as Procter & Gamble. She also expressed confidence in the company’s revised guidance, presented in August with a new CEO and CFO, deeming the 2025 projections achievable despite ongoing, albeit improving, negative organic sales. Her valuation of Kenvue utilizes a 13x CY26e EV/EBITDA multiple, a premium to its current 11x valuation.
Shares of Kenvue saw a slight increase in premarket trading Monday.
