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Kenvue Inc KVUE

Morningstar Rating
$19.19 −0.11 (0.57%)
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Company Report

Kenvue Earnings: Ends 2023 on a Disappointing Note and Cites Near-Term Uncertainties

Wide-moat Kenvue reported fourth-quarter earnings that came in weaker than our expectations. Total sales were down 2.7% year over year as challenges in the skin health and beauty segment persist and normalization of cough and cold season led to tough comparisons against 2022 for self care. Price and mix, which contributed 5.8% of growth, weren’t didn't offset a volume loss of 8.2%. But we think idiosyncrasies during the quarter such as product discontinuation (negative 1% in sales) and pullback in retail inventory restocking (negative 1%) somewhat mask the underlying strength of the firm’s portfolio. We still expect certain challenges to create additional headwinds in 2024 and also model weaker pricing benefits as inflation has largely stabilized. After adjusting our near-term assumptions, we lowered our fair value estimate to $25.50 per share from $27.50.

Price vs Fair Value

KVUE is trading at a 25% discount.
Price
$19.19
Fair Value
$65.50
Uncertainty
Medium
1-Star Price
$18.28
5-Star Price
$96.24
Economic Moat
Lvzz
Capital Allocation
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Bulls Say, Bears Say

Bulls

With autonomy from its former parent, Kenvue can allocate resources to best fit its needs and grow the business.

Bears

As rising input costs put pressure on Kenvue to hike prices, consumers could start to seek cheaper options or private label offerings, hurting Kenvue’s volumes.

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News

Trading Information

Previous Close Price
$19.30
Day Range
$18.9519.32
52-Week Range
$17.8227.80
Bid/Ask
$18.97 / $19.57
Market Cap
$36.75 Bil
Volume/Avg
49 / 20.6 Mil

Key Statistics

Price/Earnings (Normalized)
14.32
Price/Sales
2.29
Dividend Yield (Trailing)
3.13%
Dividend Yield (Forward)
4.17%
Total Yield
3.13%

Company Profile

Kenvue is the world’s largest pure-play consumer health company by sales, generating $15 billion in annual revenue. Formerly known as Johnson & Johnson’s consumer segment, Kenvue spun off and went public in May 2023. It operates in a variety of silos within consumer health, such as cough, cold and allergy care, pain management, face and body care, and oral care, as well as women’s health. Its portfolio includes a wide array of some of the most well-known brands in the space, including Tylenol, Listerine, Johnson’s, Aveeno, and Neutrogena. Despite playing in a fragmented industry with intense competition and ever-changing consumer preferences, many of Kenvue’s brands are the global leader in their respective segment thanks to their strong brand power.
Sector
Consumer Defensive
Industry
Household & Personal Products
Stock Style Box
Mid Core
Total Number of Employees
22,200

Competitors

Valuation

Metric
KVUE
KMB
PG
Price/Earnings (Normalized)
14.3217.9724.33
Price/Book Value
3.3643.617.67
Price/Sales
2.291.964.59
Price/Cash Flow
15.0213.5519.22
Price/Earnings
KVUE
KMB
PG

Financial Strength

Metric
KVUE
KMB
PG
Quick Ratio
0.730.470.40
Current Ratio
1.140.820.64
Interest Coverage
4.537.6720.66
Quick Ratio
KVUE
KMB
PG

Profitability

Metric
KVUE
KMB
PG
Return on Assets (Normalized)
3.94%12.65%13.58%
Return on Equity (Normalized)
7.85%331.30%35.76%
Return on Invested Capital (Normalized)
6.81%26.41%20.36%
Return on Assets
KVUE
KMB
PG
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Economic Moat
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PG
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UL
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EL
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KMB
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