Kenvue Inc KVUE

Kenvue: Talc and Cough Syrup Issues Not Material and Won't Hurt Kenvue’s Long-Term Potential

On Saturday, April 20, an Illinois judge ordered Johnson & Johnson and Kenvue to pay $45 million to a family relating to a fatal cancer from the companies’ Johnson’s baby powder. According to Bloomberg, jurors concluded that Kenvue was 70% responsible for the death, and J&J and one of its units were responsible for the remaining 30%. While action plans for both companies remain unclear, we expect Kenvue and J&J to appeal the case. Furthermore, we continue to believe that any litigation regarding talc will not affect Kenvue’s wide moat rating or $25.50 fair value estimate, given that the firm has an indemnity agreement from J&J that covers all talc-related liabilities in North America. While Kenvue remains responsible for any liability outside the US and Canada, we believe this is immaterial.