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Investing.com - JPMorgan has reiterated its Overweight rating and $24.00 price target on Kenvue Inc (NYSE:KVUE), the $35.7 billion consumer health company, following reports about a forthcoming Health and Human Services (HHS) study on acetaminophen use during pregnancy. According to InvestingPro data, the stock is currently trading below its Fair Value, with analyst targets ranging from $19 to $26.
The Wall Street Journal reported that HHS will release a report this month potentially linking acetaminophen use in pregnant women to autism spectrum disorder development. HHS has stated that claims about the report’s contents remain speculative until its official release.
This development resurfaces concerns from 2023 regarding multi-district litigation that alleged similar connections, which Kenvue and other defendants largely defeated when a judge excluded the plaintiffs’ general causation experts’ opinions.
JPMorgan notes that the FDA has previously cited limitations and inconsistent findings in current observational studies, stating they were unable to support a determination of causality between acetaminophen and neurobehavioral outcomes. Tylenol products already direct pregnant or breastfeeding patients to consult healthcare providers before use.
While pregnant women represent a relatively small percentage of Tylenol sales, JPMorgan cautions that investors may worry about broader consumer concerns regarding acetaminophen products, and that a change in position from HHS/FDA on causality could potentially embolden plaintiff litigators in ongoing or future cases. The stock has declined 10% over the past week, with technical indicators suggesting oversold conditions. Get deeper insights and access to comprehensive analysis of Kenvue and 1,400+ other stocks through InvestingPro’s detailed research reports.
In other recent news, Kenvue Inc has been at the center of discussions following reports about potential health concerns related to its Tylenol product. The Wall Street Journal reported that the Department of Health and Human Services might issue a report linking Tylenol’s active ingredient, acetaminophen, to autism when used during pregnancy. This has led to a significant decline in Kenvue’s stock, with a noted drop of over 9%. In response to these developments, Evercore ISI adjusted its price target for Kenvue from $25.00 to $23.00 but maintained an "In Line" rating. Meanwhile, Canaccord Genuity and BofA Securities both reiterated their Buy ratings, with Canaccord setting a $26.00 price target and BofA maintaining a $25.00 target. These firms suggest that the legal risks associated with the acetaminophen concerns might be minimal. Despite the recent volatility, some analysts remain optimistic about Kenvue’s prospects, though the situation continues to evolve.
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