Kenvue stock rallied sharply Monday on reports that activist investor Starboard Value established a substantial stake in the consumer products company, which was spun out of Johnson & Johnson last year.
The Wall Street Journal reported late Sunday that Starboard Value sees Kenvue as having some of the top consumer brands in its sector, including Tylenol and Listerine, but wants the company to focus on boosting the KVUE share price.
Going into Monday's market open, Kenvue stock had traded nearly flat in 2024, underperforming the broader market. Top competitors Procter & Gamble and Advil-parent Haleon have advanced 17% and 23%, respectively.
Kenvue's brands include Aveeno, Band-Aid, Zyrtec, Neosporin and Neutrogena. The company has a Skin Health & Beauty division which saw revenue fall 3.8% in Q2 to $1.103 billion. The Skin Health & Beauty segment made up 27% of its Q2 revenue.
Kenvue stock rallied 6.8% to 23.20 during market trade on Monday. The company was spun off from Johnson & Johnson and began trading on the New York Stock Exchange in May 2023 with an IPO price of 22.
While Kenvue stock jumped on news about Starboard, other stocks in the IBD-tracked Cosmetics/Personal Care industry group broadly remained little changed. The 40 stocks in the industry group have collectively fallen around 8% in 2024.
However, fellow industry group stock ELF Beauty appeared to catch an updraft on the Starboard Value news, jumping 7.4% to 116.20 on Monday.
Baird on Monday lowered its price target on ELF Beauty to 175 from 240 while maintaining an outperform rating. The firm wrote that while U.S. demand seems to be slowing, it still sees room for more conservative growth and valuation assumptions.
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