Kenvue (KVUE, Financial) secured a legal triumph as the judge handling the initial Tylenol lawsuit in California ruled in favor of the company, according to Gordon Haskett. This development is described as a "significant win" for Kenvue. Furthermore, the firm anticipates that the only other California case under the same judge will be dismissed for similar reasons.
This ruling greatly aids Kenvue in resolving outstanding legal issues after the 2023 dismissal of all Tylenol cases related to ASD-ADHD in both the multi-district litigation and federal courts. The analyst notes that only a few Tylenol cases are yet to be resolved, currently remaining in the Illinois state court system.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 15 analysts, the average target price for Kenvue Inc (KVUE, Financial) is $24.27 with a high estimate of $29.00 and a low estimate of $22.00. The average target implies an upside of 2.64% from the current price of $23.65. More detailed estimate data can be found on the Kenvue Inc (KVUE) Forecast page.
Based on the consensus recommendation from 19 brokerage firms, Kenvue Inc's (KVUE, Financial) average brokerage recommendation is currently 2.6, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
KVUE Key Business Developments
Release Date: February 06, 2025
- Organic Sales Growth (Full Year 2024): 1.5%
- Adjusted Gross Margin (Full Year 2024): 60.4%, an increase of 200 basis points year over year
- Adjusted Diluted EPS (Full Year 2024): $1.14
- Organic Sales Growth (Q4 2024): 1.7%
- Adjusted Diluted EPS (Q4 2024): $0.26
- Self Care Organic Sales Growth (Q4 2024): 2.9%
- Essential Health Organic Sales Decline (Q4 2024): 0.7%
- Skin Health and Beauty Organic Sales Growth (Q4 2024): 2.6%
- Adjusted Operating Margin (Full Year 2024): 21.5%
- Net Interest Expense (Full Year 2024): $378 million
- Adjusted Effective Tax Rate (Full Year 2024): 25.5%
- Expected Organic Sales Growth (2025): 2% to 4%
- Expected Adjusted Operating Margin Expansion (2025): Planned expansion year over year
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Kenvue Inc (KVUE, Financial) expanded its adjusted gross margin by 200 basis points year over year to 60.4%, driven by strong productivity enhancements.
- The company successfully executed the first year of its 'Vue Forward' initiative, aiming for $350 million in annualized savings by 2026.
- Kenvue Inc (KVUE) increased its total brand investment by about 20%, focusing on advertising, social media influencer-led campaigns, and healthcare professional engagement.
- The Skin Health and Beauty segment showed volume-led organic sales growth, particularly strong in EMEA and Latin America.
- Kenvue Inc (KVUE) is launching 40% more innovation in 2025 compared to 2024, aiming to strengthen its portfolio through premiumization and extension into adjacencies.
Negative Points
- Organic sales growth for 2024 was 1.5%, below expectations, partly due to lower incidences of cough, cold, and flu, impacting the pediatric pain franchise.
- The company faced a reduction in distributor orders in Asia Pacific, particularly in China, due to temporary distribution network disruptions.
- Fourth-quarter organic sales growth was only 1.7%, falling short of expectations due to weak December sales.
- Kenvue Inc (KVUE) anticipates a challenging external environment in 2025, with economic uncertainty, geopolitical tensions, and a stronger dollar.
- The company expects a three- to four-point headwind in the first quarter of 2025 due to destocking and strategic price investments.
