Kenvue's Growth Forecast: Exploring The Future Of Johnson & Johnson's Carve-Out

RBC Capital Markets analyst Nik Modi initiated coverage on Kenvue Inc KVUE with an Outperform rating and a price target of $29.
Kenvue is Johnson & Johnson's JNJ consumer-healthcare business carve-out, which debuted on the U.S. stock exchange earlier this month.
The analyst is bullish on Kenvue's strong portfolio of iconic brands such Band-Aid, Tylenol, Zyrtec, Neutrogena and Listerine, having a legacy of over 100 years.
Modi thinks the company's pure-play consumer health and beauty portfolio gives it a competitive edge over its peers.
The analyst believes the consumer category promises strong profitability growth, given the aging population and increasing wellness awareness.
However, the analyst needs clarity on the timing of probable Kenvue's shares divestiture by Johnson & Johnson and believes Kenvue needs to improve market shares in the skin/sun/hair segment and sustain its strong position in Self Care segment.
Modi expects organic sales growth in mid-single-digits in the near term and low-single-digits in the longer term.
The analyst expects revenues of $15.7 billion in 2023 and $16.3 billion in 2024. Modi projects an adjusted EPS of $1.27 in 2023 and $1.33 in 2024.
The analyst expects a top-line CAGR of 3.3% and peak margins of 23.4% by 2032.
Also, B and A Securities and UBS initiated coverage on the stock at Buy (PT: $30) and Neutral (PT: $28), respectively.
Price Action: KVUE shares are trading lower by 3.13% at $25.48 on the last check Tuesday.

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