Kenvue stock price target lowered to $22 by RBC on soft quarter

Investing.com - RBC Capital lowered its price target on Kenvue Inc (NYSE:KVUE) to $22.00 from $24.00 on Friday, while maintaining a Sector Perform rating on the consumer health company’s stock. The stock currently trades at $21.79, with InvestingPro data showing a "FAIR" overall financial health score.

The price target reduction follows what RBC described as a "soft" quarter for Kenvue, which was impacted by slower category growth, destocking, and weak seasonal performance. These results aligned with the company’s earlier preannouncement. Despite challenges, the company maintains impressive gross profit margins of 58.24%.

In response to year-to-date softness and sluggish category growth, Kenvue has lowered its guidance for the year to what RBC termed "more reasonable levels."

RBC noted that Kenvue’s early strategic review findings revealed "self-induced complexity" within the business. The company plans to adopt a "less is more" approach, focusing on key brands in major regions, which might include portfolio optimization.

The research firm indicated that Kenvue’s management "sounded confident and has a better grasp of issues," with execution now being the primary focus for the company going forward.

In other recent news, Kenvue Inc. reported its second-quarter 2025 earnings, revealing an adjusted diluted earnings per share of $0.29, which fell short of the forecasted $0.35. The company also missed revenue expectations, reporting $3.84 billion against an anticipated $4.18 billion. Following these results, Canaccord Genuity lowered its price target for Kenvue to $26.00 from $29.00, while maintaining a Buy rating. The firm cited a 4.0% decline in sales and challenges such as weaker consumption and increased promotional activity.

Jefferies also adjusted its outlook for Kenvue, reducing the stock price target to $25.00 from $26.00, but kept a Buy rating. This adjustment came after Kenvue’s guidance revision, which suggested potential challenges in 2025, including softer top-line performance and margin compression. Despite these setbacks, both firms continue to maintain a positive outlook on Kenvue’s stock. These developments highlight the financial pressures Kenvue is currently navigating.

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