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Investing.com - Evercore ISI lowered its price target on Kenvue Inc (NYSE:KVUE) to $23.00 from $25.00 on Monday, while maintaining an "In Line" rating amid concerns over the company’s Tylenol brand. According to InvestingPro data, the stock currently trades at $18.62, with analyst targets ranging from $19 to $26.
The price target reduction follows a 9% sell-off in Kenvue shares on Friday after a Wall Street Journal report suggested potential links between acetaminophen, Tylenol’s active ingredient, and neurodevelopmental disorders when used during pregnancy.
FDA Commissioner Marty Makary clarified over the weekend that no official report has been written on the matter, stating "there’s nothing really to report, because we’re still in our discussions." The renewed attention appears connected to a mid-August scientific review that supported correlations between prenatal acetaminophen use and disorder risks.
Tylenol represents approximately 7% of Kenvue’s global sales but likely accounts for 10-15% of profits, according to Evercore ISI. The firm noted the brand commands a higher price premium compared to other Kenvue products.
The research firm cited lower peer valuations and potential liability concerns as factors in its decision, while acknowledging that Kenvue’s 3.7% dividend and potential for SG&A efficiencies provide some valuation support during this period of uncertainty under interim leadership.
In other recent news, Kenvue Inc . is facing significant attention due to reports of a potential link between its flagship product, Tylenol, and autism. This follows a Wall Street Journal article indicating that U.S. Health Secretary Robert F. Kennedy Jr. plans to release a report suggesting a connection between prenatal acetaminophen use and autism risk. The Department of Health and Human Services is expected to release this report soon, although an HHS spokesperson has emphasized that any current claims are speculative until the final report is issued. Amid these developments, Kenvue’s stock has experienced notable fluctuations.
Despite the concerns, Evercore ISI has maintained an "In Line" rating with a $25.00 price target on Kenvue, indicating stability in their outlook. Similarly, BofA Securities has reiterated its Buy rating, also with a $25.00 price target, suggesting confidence in the company’s long-term prospects despite the recent volatility. Meanwhile, RBC Capital has kept its Sector Perform rating with a $22.00 price target, acknowledging ongoing litigation and regulatory concerns. These ratings reflect a cautious yet steady approach by analysts as the situation unfolds.
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