Kenvue, Inc. (KVUE) AI Stock Analysis

• Market Cap: $42.68B
• Dividend Yield: 3.65%
• Average Volume (3M): 16.45M
• Price to Earnings (P/E): 41.5
• Beta (1Y): 0.47
• Revenue Growth: 0.08%
• EPS Growth: -32.67%
• Country: US
• Employees: 22,000
• Sector: Technology
• Sector Strength: 40
• Industry: Household & Personal Products
• EPS (TTM): 0.54
• Shares Outstanding: 1,911,240,700
• 10 Day Avg. Volume: 14,688,324
• 30 Day Avg. Volume: 16,454,192
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 2.88
• Price to Cash Flow (P/CF): 14.10
• P/FCF Ratio: 12.40
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $24.10
• Price Target Upside: 7.93% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 13

Kenvue's stock score reflects a stable but challenging financial performance, with strengths in cash generation and strategic brand investments. Technical analysis supports a positive trend, though valuation concerns are present due to a high P/E ratio. The earnings call and recent corporate events provide a cautiously optimistic outlook, backed by strategic initiatives and board enhancements.

Positive Factors

Innovation and Growth

The company plans a 40% growth in innovation across all divisions in 2025, with bolder and faster new launches and increased investments in influencers and digital marketing.

Operational Independence

Kenvue is near the completion of exiting its remaining transition service agreements, moving towards full operational independence from JNJ, which streamlines processes and focuses on consumer health.

Strategic Initiatives

Kenvue effectively avoided a proxy battle with Starboard Value due to the appointments.

Negative Factors

Market Challenges

Near-term challenges exist with disruption at its distribution network within APAC, especially in China, and a weaker start to the cough, cold, & flu season in the US and China.

Sales Performance

Sales were down -0.1%, missing our/Street's estimate of +2.6%.

Segment Performance

Expectations for Q1 volumes at KVUE’s skin health & beauty segment are tempered given recent weakness in Nielsen data.

Kenvue, Inc. Business Overview & Revenue Model

Company Description

Kenvue Inc. operates as a consumer health company worldwide. The company operates through three segments: Self Care, Skin Health and Beauty, and Essential Health. The Self Care segment offers cough, cold and allergy, pain care, digestive health, smoking cessation, and other products under the Tylenol, Nicorette, and Zyrtec brands. The Skin Health and Beauty segment provides face and body care, hair care, and sun and other care products under the Neutrogena, Aveeno, and OGX brand names. The Essential Health segment offers oral and baby, women's health, and wound care products under the Listerine, Johnson's, Band-Aid, and Stayfree brands. The company was incorporated in 2022 and is headquartered in Skillman, New Jersey. Kenvue Inc. operates as a subsidiary of Johnson & Johnson.

How the Company Makes Money

Kenvue, Inc. generates revenue primarily through the sale of its consumer health products. The company has a diverse portfolio of brands that are sold across multiple channels, including retail stores, e-commerce platforms, and direct-to-consumer sales. Key revenue streams for Kenvue include over-the-counter medications, skincare products, and essential health goods. Strategic partnerships with retailers and distributors, along with an emphasis on research and development for product innovation, significantly contribute to the company's earnings. Additionally, Kenvue leverages its strong brand recognition and global reach to maintain a competitive advantage in the consumer health market.

Kenvue, Inc. Financial Statement Overview

Summary

Kenvue demonstrates consistent revenue with fluctuating profitability and increased leverage. The company shows effective cash generation but faces challenges in maintaining profit margins and managing debt levels. Stability in equity offers some resilience against financial instability.

Income Statement

The income statement reflects moderate performance, with stable gross profit margins around 58% over the years. However, net profit margin has declined from 13.5% in 2019 to 6.7% in 2024, indicating pressure on profitability. Revenue growth has been modest, with a slight increase over time. EBIT and EBITDA margins have decreased recently, showing a drop in operational efficiency.

Balance Sheet

The balance sheet reveals a stable equity base but increased leverage, with a debt-to-equity ratio rising from negligible in 2020 to 0.89 in 2024. ROE has decreased from 7.8% in 2020 to 10.7% in 2024, reflecting challenges in generating returns. The equity ratio has decreased, suggesting higher reliance on debt financing.

Cash Flow

Cash flow analysis indicates a decline in free cash flow growth, with a significant drop from 2023 to 2024. The operating cash flow to net income ratio has remained strong, indicating efficient cash generation relative to net income. However, a decline in free cash flow to net income ratio suggests potential cash flow management issues.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
15.46B	15.44B	14.95B	15.05B	14.47B
	Gross Profit
8.96B	8.64B	8.29B	8.42B	7.85B
	EBIT
1.84B	2.51B	2.67B	2.92B	-979.00M
	EBITDA
1.84B	3.17B	3.64B	3.87B	3.79B
	Net Income Common Stockholders
1.03B	1.66B	2.06B	2.08B	-879.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.07B	1.38B	1.23B	740.00M	618.00M
	Total Assets
25.60B	27.85B	27.32B	27.93B	29.18B
	Total Debt
8.61B	8.43B	116.00M	258.00M	320.00M
	Net Debt
7.54B	7.04B	-1.11B	-482.00M	-298.00M
	Total Liabilities
15.93B	16.64B	7.29B	7.53B	10.82B
	Stockholders Equity
9.67B	11.21B	20.02B	20.40B	18.36B
Cash Flow		Free Cash Flow
1.33B	2.70B	2.15B	39.00M	3.17B
	Operating Cash Flow
1.77B	3.17B	2.52B	334.00M	3.40B
	Investing Cash Flow
-425.00M	-488.00M	-390.00M	-171.00M	-83.00M
	Financing Cash Flow
-1.56B	-2.53B	-1.58B	0.00	-3.46B

Kenvue, Inc. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 22.33
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KVUE, the sentiment is Negative. The current price of 22.33 is below the 20-day moving average (MA) of 23.30, below the 50-day MA of 22.53, and above the 200-day MA of 21.46, indicating a neutral trend. The MACD of 0.33 indicates Positive momentum. The RSI at 61.46 is Neutral, neither overbought nor oversold. The STOCH value of 91.81 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for KVUE.

Kenvue, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CL	79 Outperform	$74.34B	26.12	704.02%	2.18%	3.30%	26.83%
PG	76 Outperform	$383.97B	26.09	31.05%	2.46%	0.49%	5.02%
UL	76 Outperform	$151.54B	24.04	30.53%	3.10%	1.99%	-10.59%
CHD	74 Outperform	$26.11B	44.75	14.25%	1.08%	4.08%	-22.34%
KMB	71 Outperform	$45.74B	18.26	290.03%	3.57%	-1.83%	45.13%
KVUE	70 Outperform	$42.68B	41.49	9.87%	3.65%	0.08%	-32.67%
Sector *	57 Neutral	$18.52B	9.81	-13.96%	2.71%	5.07%	-23.65%

Kenvue, Inc. Corporate Events

Kenvue Inc. Expands Board with Starboard Agreement

On March 5, 2025, Kenvue Inc. announced a cooperation agreement with Starboard Value, resulting in the appointment of three new directors to its Board: Sarah Hofstetter, Erica Mann, and Jeffrey C. Smith. This strategic move temporarily expands the Board from 11 to 14 members and aligns with Starboard’s commitment to support Kenvue’s director nominees at the 2025 Annual Meeting. The agreement aims to enhance Kenvue’s growth and shareholder value, with Starboard withdrawing its previous director nominations and agreeing to a standstill period.