Kenvue Inc. (KVUE), headquartered in Skillman, New Jersey, is a dedicated consumer health company valued at $35.5 billion by market cap. It operates through three segments: Self Care, Skin Health and Beauty, and Essential Health.
Companies worth $10 billion or more are generally described as "large-cap stocks," and Kenvue fits right into that category, reflecting its substantial size, influence, and dominance in its industry. Once a part of Johnson & Johnson’s (JNJ) consumer health unit, Kenvue boasts an extensive and trusted brand portfolio cultivated over 135 years, featuring iconic household names.
The leading consumer products company’s stock has slipped 29.7% from its 52-week high of $26.66, which was hit on June 30 last year. KVUE stock has declined 10.5% over the past three months, trailing behind the Dow Jones Industrials Average ($DOWI), which is down 1.6% over the same time frame.
Longer term, Kenvue’s stock has fallen 13.9% on a YTD basis and dropped 29.3% over the past 52 weeks, lagging behind DOWI’s 3.9% gains in 2024 and 15.3% returns over the past 52 weeks.
To affirm the bearish trend, KVUE has consistently traded below the 50-day and 200-day moving averages since late May.
KVUE's lackluster performance compared to the broader Dow Jones in the past year can be attributed to several factors — notably its declining net income and sluggish organic growth, particularly evident in its U.S. skin health and beauty business and the China market. These challenges have not only affected financial metrics but have also impacted consumer confidence in the company's products and services.
Despite challenges, the stock has taken a positive turn, with Kenvue's shares gaining over 5% after the Q1 earnings release on May 7. The company's net sales of $3.9 billion exceeded analyst estimates, and its adjusted EPS of $0.28 beat Wall Street's expectations by 12%.
Meanwhile, another industry participant, Ollie's Bargain Outlet Holdings, Inc. (OLLI), has outshined KVUE, gaining a whopping 65.4% over the past 52 weeks and returning 29.5% in 2024.
Despite KVUE’s overall underperformance relative to DOWI, analysts are moderately bullish about KVUE’s prospects. The stock has a consensus “Moderate Buy” rating from the 14 analysts covering it. The mean target of $22.83 suggests a potential upside of 23.2% from the current price levels.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
