Shares have fallen not too long ago as buyers develop into involved in regards to the firm’s publicity to lawsuits over the painkiller Tylenol.
However some Wall Avenue analysts say the market’s response is overblown and see a robust shopping for alternative for the patron well being firm.
(ticker: KVUE), which not too long ago break up from
Johnson & Johnson
(JNJ), faces lawsuits alleging that Tylenol brought on neurological problems in youngsters whose moms took the drug throughout being pregnant. They are saying the corporate is at fault as a result of it didn’t put a warning about potential dangers on the bottle label.
Acetaminophen, the lively ingredient in Tylenol, is “probably the most studied medication in historical past,” and U.S. well being and medical regulators agree it’s protected, he mentioned.
The inventory fell 2.7% in August, and JPMorgan analyst Andrea Teixeira mentioned in a notice Friday that the decline gives a shopping for alternative. Teixeira charges the inventory as Obese with a worth goal of $29.
“We imagine the destructive inventory response (promote now, ask questions later) was overdone even contemplating the potential legal responsibility,” Teixeira wrote. She added that the inventory’s valuation helps her perception that that is the proper time to purchase for medium- and long-term buyers.
Kenvue presently trades at 16.5 occasions ahead earnings, which is beneath the common of 18.7 occasions.
Deutsche Financial institution analyst Steve Powers shares related sentiments, and upgraded the inventory to purchase from maintain with a worth goal of $27 on Sunday. He wrote in a analysis notice that the authorized dangers have been priced in, and the inventory is presently oversold.
“KVUE is a high-quality (and now liquid) inventory, with membership in…
Customary & Poor’s 500
), Powers mentioned. “It has a portfolio of main manufacturers, a clear steadiness sheet, and important alternatives for trade consolidation.”
Shares in Kenvue rose 3.9% on Monday to $22.13.
Write to Angela Palumbo at firstname.lastname@example.org
(tags for translation) Cosmetics / Toiletry