Kenvue Inc

Kenvue, Inc. is a consumer health company with leading brands like Tylenol, Listerine, and Neutrogena. We see significant opportunities for Kenvue to unlock value by reinvesting in historically underfunded brands, optimizing its cost structure, and improving margins to enhance cash flow. The market reaction to recent reports linking acetaminophen to autism risk during pregnancy is viewed as overdone, as no new scientific evidence has established a causal link, and pregnant women account for less than 1% of Tylenol's global sales. We continue to hold the company in the Fund and will closely monitor Kenvue’s progress.

Kenvue manufactures the well-known Tylenol® products, with paracetamol as the active ingredient. Kenvue has countered the allegations that paracetamol causes autism and points to the scientific safety of Tylenol. We are waiting for the situation to be clarified and sold the stock as a precautionary measure.

Kenvue, Inc. is a consumer health company with strong brand recognition in Self Care, Skin Health and Beauty, and Essential Health. The recent spin-off from Johnson & Johnson allows Kenvue to focus on its brands, which include Tylenol and Neutrogena. Despite trading at a low valuation multiple of 18x compared to a peer median of 25x, Kenvue has potential for growth, especially in its Self Care and Essential Health sectors. The company’s organic growth challenges stem from its Skin Health and Beauty segment, which Starboard plans to address through enhanced marketing strategies, similar to successful campaigns in the industry.

Kenvue's management is taking greater control of its distribution, focusing on accelerating innovation, reinvesting in its brands, and enhancing customer engagement. Notably, in 4Q, the company’s Health and Beauty segment returned to positive volume growth after several quarters of decline. Activist investor Starboard Value could help further unlock value as pressure mounts to reverse underperformance in several business segments.