BofA sees ‘attractive entry point’ in Kenvue after Tylenol controversy
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Bank of America is sticking by Kenvue and views its most recent sell-off as a buying opportunity for investors. Analyst Anna Lizzul reiterated her buy rating and $25 price target on the stock in a note to clients, reaffirming her expectation that the stock has more than 34% potential upside. The analyst remains bullish on the stock, which she said is trading at a discount to the average of peer names in household and personal care, such as Procter & Gamble. “With a new CEO and CFO, KVUE took the opportunity to reset expectations at earnings in August. We see its lowered 2025 guidance as achievable, with improving although still negative organic sales through 2025. We value KVUE with a 13x CY26e EV/EBITDA multiple, a premium to its current valuation of 11x,” Lizzul said. “We reiterate our Buy rating as we see a widening discount as a particularly attractive entry point.” KVUE 1Y mountain Kenvue stock performance over the past year. Shares of the consumer health company — which makes over-the-counter pain medicines including Tylenol and Motrin and owns brands such as Band-Aid, Aveeno and Neutrogena — are down 12.8% year to date. The stock slid more than 10% on Friday after The Wall Street Journal reported that Health and Human Services Secretary Robert F. Kennedy Jr. will likely link autism to the use of the Kenvue’s Tylenol in pregnant women. HHS plans to release a report suggesting this link, along with other potential causes of autism and its treatment, this month, the report said. Lizzul suggested the report will not have a material effect on the stock, reminding investors that Kenvue faced potential litigation on the proposed link in 2023 and that the U.S. Food and Drug Administration at the time upheld its most recent findings, which could not support causality between the use of acetaminophen during pregnancy and the risk of Autism Spectrum Disorder (ASD) and Attention-Deficit/Hyperactivity Disorder (ADHD). “Without further scientific evidence, there may not be support for causality to form a direct link with no other proximate causation, according to a third party litigation expert. KVUE has maintained that Tylenol is safe to use according to label directions,” Lizzul wrote in the note. Shares rose slightly in the premarket Monday.
