Stock Analysis & Valuation Kenvue Inc. (KVUE)

• Previous Close: $17.42
• Sector Valuation Confidence Level: Low

Valuation method	Value, $	Upside, %
Artificial intelligence (AI)	31.24	79
Intrinsic value (DCF)	9.73	-44
Graham-Dodd Method		n/a
Graham Formula	4.37	-75

Strategic Investment Analysis

Company Overview

Kenvue Inc. (NYSE: KVUE) is a leading global consumer health company, spun off from Johnson & Johnson in 2022. Headquartered in Skillman, New Jersey, Kenvue operates in three key segments: Self Care (Tylenol, Nicorette, Zyrtec), Skin Health and Beauty (Neutrogena, Aveeno, OGX), and Essential Health (Listerine, Johnson's, Band-Aid, Stayfree). With a portfolio of trusted household brands, Kenvue serves a broad consumer base across over 100 countries, generating $15.5B in annual revenue. The company benefits from strong brand equity, innovation-driven product development, and Johnson & Johnson’s legacy in healthcare. As a pure-play consumer health business, Kenvue is well-positioned in the defensive Household & Personal Products sector, catering to resilient demand for over-the-counter medications, skincare, and personal care essentials. Its diversified revenue streams and global distribution network provide stability amid economic cycles.

Investment Summary

Kenvue presents a compelling investment case due to its strong brand portfolio, stable cash flows, and defensive sector positioning. With a market cap of $45.6B and a beta of 0.97, it offers lower volatility relative to the broader market. The company generated $1.77B in operating cash flow (FY 2024) and pays a dividend ($0.82/share), appealing to income-focused investors. However, risks include high leverage ($8.7B total debt) and dependence on mature brands in a competitive space. Margin pressures from inflation and private-label competition could weigh on profitability. Long-term growth hinges on innovation and emerging market expansion.

Competitive Analysis

Kenvue’s competitive advantage lies in its portfolio of iconic, science-backed brands with high consumer trust, particularly in OTC healthcare (Tylenol, Listerine) and dermatology (Neutrogena). Unlike many peers, it combines pharmaceutical-grade R&D (a legacy of J&J) with mass-market distribution, allowing premium pricing. The company’s scale—operating in 100+ countries—provides cost advantages in manufacturing and marketing. However, its mid-tier position between pharmaceutical companies (e.g., GSK Consumer Health) and pure-play personal care firms (e.g., Olay) creates niche competition on multiple fronts. While Kenvue’s brands lead in categories like acne care (Neutrogena) and bandages (Band-Aid), they face pressure from digitally-native skincare brands (e.g., The Ordinary) and private-label alternatives. Its innovation pipeline, focused on clinically proven formulations, differentiates it from generic competitors but requires sustained R&D investment. The spin-off from J&J allows operational focus but removes synergies with pharmaceuticals.

Major Competitors

• Procter & Gamble (PG): PG’s broader portfolio (including Oral-B, Vicks) competes in oral care and OTC health. Strengths include unmatched scale and ad spend, but Kenvue’s specialized health focus allows deeper category expertise.
• GSK Consumer Health (Haleon) (GSK): Haleon (spun off from GSK) directly competes in OTC with brands like Advil and Sensodyne. Strong in pain relief, but Kenvue’s Tylenol and dermatology focus provide differentiation.
• Estée Lauder (EL): EL dominates prestige skincare (Clinique), while Kenvue’s Neutrogena/Aveeno target mass-market. EL has higher margins but lacks Kenvue’s healthcare crossover.
• Clorox (CLX): CLX’s Burt’s Bees competes in natural personal care (vs. Aveeno). Smaller health portfolio but stronger in disinfectants—a gap for Kenvue.
• The Ordinary (Deciem) (private): This digitally-native skincare brand challenges Neutrogena with transparent pricing and social media-driven growth. Lacks Kenvue’s retail distribution but excels in Gen Z appeal.