Investing.com -- Piper Sandler lifted its rating for Kenvue (NYSE:KVUE) to Overweight from Neutral on Monday, pointing to positive momentum in the company’s margin trajectory and overall business performance.
The firm has a price target of $26 on the stock as 2025 gets going.
In the note, Piper Sandler analysts highlighted improvements driven by Kenvue’s "Our Vue Forward" initiative and recent transitions out of TSA agreements.
"We feel better about KVUE’s margin trajectory, supported by Our Vue Forward and TSA exits," they stated.
These changes are expected to strengthen Kenvue’s financial foundation and operational efficiency.
A key concern among investors has been Kenvue’s Skin Health & Beauty segment.
However, Piper Sandler remains cautiously optimistic due to recent brand investments in this area.
"Skin Health & Beauty has been a key investor pushback, but recent brand investments make us cautiously hopeful here," the analysts noted.
Beyond Skin Health & Beauty, the firm said the rest of Kenvue’s business has been performing well, and it sees potential benefits from activist involvement.
They believe the involvement could help create a more balanced focus across all segments, further supporting the company’s growth trajectory.
Despite recent share appreciation, Piper Sandler believes there is still significant upside for Kenvue.
“Though shares have appreciated a bit in recent months, at ~17/18x P/E, we think there’s still ample room to better align with peers," the firm concluded.