S&P 500 rides Tesla rally to fresh record ahead of Fed meeting
Investing.com - Goldman Sachs has reiterated its Neutral rating and $22.00 price target on Kenvue Inc (NYSE:KVUE) amid potential headline risk surrounding Tylenol. The stock, which has fallen over 10% in the past week according to InvestingPro data, is currently showing oversold conditions based on technical indicators.
The investment bank notes media reports that HHS Secretary RFK Jr. could release a report later this month examining possible links between Tylenol use during pregnancy and autism in offspring. While HHS confirmed it is working on a report, it has not disclosed its contents or conclusions.
This issue has legal precedent, as United States District Court Judge Denise Cote ruled in December 2023 that plaintiffs lacked admissible evidence demonstrating prenatal acetaminophen exposure causes ADHD in offspring. The matter remains under appeal in the Second Circuit.
Goldman Sachs identifies potential reputational risk for Kenvue, particularly if medical professionals stop recommending Tylenol during pregnancy. The firm estimates Tylenol accounts for 8-9% of Kenvue’s global sales, with pregnant women representing approximately 9% of U.S. Tylenol buyers. Despite these concerns, InvestingPro data shows the company maintains impressive gross profit margins of 58.15% and generates annual revenue of $15.14 billion.
The analysis suggests that for every 2% of total company sales lost from reduced Tylenol demand, Kenvue could face a 2-3% headwind to fiscal year 2026 earnings per share, depending on margins. InvestingPro subscribers have access to 8 additional exclusive insights about Kenvue’s financial health and growth prospects, including detailed analysis of the company’s earnings potential and market position. Get the full picture with InvestingPro’s comprehensive research report, available for over 1,400 US stocks.
In other recent news, Kenvue Inc . is navigating concerns surrounding its Tylenol brand. The Wall Street Journal reported that the Department of Health and Human Services (HHS) plans to release a study potentially linking acetaminophen, Tylenol’s active ingredient, to autism spectrum disorder when used during pregnancy. Despite these concerns, JPMorgan has maintained an Overweight rating on Kenvue with a $24.00 price target, while Canaccord Genuity reiterated a Buy rating with a $26.00 target, indicating minimal legal risk based on current reputable studies. However, Evercore ISI has adjusted its price target for Kenvue to $23.00 from $25.00, maintaining an "In Line" rating due to these emerging concerns. The anticipated HHS report has already impacted Kenvue’s stock, which saw a significant drop following the initial news. An HHS spokesperson emphasized that any claims about the report’s contents remain speculative until its official release. The ongoing developments have prompted analysts to maintain varying perspectives on Kenvue’s stock outlook. Investors are closely monitoring the situation as they await the official findings from the HHS study.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.