J&J Kenvue IPO: KVUE starts trading on NYSE

The test will continue to progress through the development pathway, culminating in an FDA 510K application for regulatory approval. This press release is neither an offer to sell nor a solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful. This webcast will be available to investors and other interested parties by accessing the Johnson & Johnson website at . This INNSpired article was written according to INN editorial standards to educate investors.

1. This will likely drive earnings growth while decreasing the amount of cash flow required to sustain the dividend.
2. The spinoff posted $14.95 billion in sales for 2022 and a net income of $1.46 billion on a pro forma basis, according to a preliminary prospectus filed with the Securities and Exchange Commission last week.
3. KVUE currently has a P/E of less than 16x, below the sector median of nearly 18x, signaling it may be undervalued.
4. The company’s self-care unit, which includes products for eye care, cough and cold, and vitamins, generated $6 billion in net sales for 2022, accounting for 40% of total revenue.

It is the first diagnostic test of its kind, with multiple potential applications in personalized healthcare. The startup was recently granted the prestigious Alex Casta Audience Award via the EIT Health Catapult 2023 competition. In addition to healthcare, the Swiss government invests heavily in research and development across multiple sectors. As a result, even though its population totals just over 8.7 million, Switzerland holds the world’s third-highest number of patents per capita, just behind the United States and Japan.

In other words, even if Kenvue improves margins and grows revenue at the high end of management’s estimate, the stock is worth only $18/share. For reference, Kenvue’s economic book value, or no growth value, is $14/share. In its S-1, Kenvue notes that the consumer health market grew at a compound annual growth rate (CAGR) of 4.8% from 2019 to 2022, and management believes the market will continue to grow at a CAGR of 3 to 4% globally through 2025. To give its consumer health business the agility to better innovate and grow across its categories, Johnson & Johnson was planning to create two standalone companies.

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As a long-term investor in JNJ stock, last year I was faced with the decision of whether to exchange some or all of my shares for KVUE shares. In a separate article, I explained why I ultimately decided against participating in the offer. My regular readers might remember my article from last August, in which I shared my reasons for not participating in the exchange offer and instead sticking with my full position in JNJ stock.

It helps, too, that Switzerland has the same commitment to excellence as Germany — exemplified by the country’s global dominance of the watchmaking market, with brands such as Patek Philippe, Rolex and Blancpain. The company, which trades under the ticker KVUE, holds a wealth of widely known consumer brands such as Band-Aid, Tylenol, Listerine, Neutrogena, Aveeno and J&J’s namesake baby powder. Even with soft guidance issued for 2024 and headwinds expected to continue into the first half of the year, KVUE presents a compelling buying opportunity. Currently, they have a well-covered dividend, initiated a buyback program, and an A-rated balance sheet; all great things you want to see from a business standpoint.

The new company is expected to begin trading on May 4 on the New York Stock Exchange under the trading symbol KVUE. With its big day less than a week away, investors are watching keenly as KVUE stock gears up to start trading. BIJUVA® is the first fixed-dose combination of two bioidentical hormones that are most often preferred by women with VMS (estradiol and micronized progesterone). The rationale for the development of BIJUVA was best forex indicator in the world to provide healthcare providers with a well-studied and Health Canada approved treatment option that has demonstrated clinical effectiveness with a favorable benefit/risk profile. INN does not provide investment advice and the information on this profile should not be considered a recommendation to buy or sell any security. INN does not endorse or recommend the business, products, services or securities of any company profiled.

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Built on more than a century of heritage, our iconic brands, including Aveeno®, BAND-AID® Brand Adhesive Bandages, Johnson’s®, Listerine®, Neutrogena®, and Tylenol®, are science-backed and recommended by healthcare professionals around the world. At Kenvue, we believe in the extraordinary power of everyday care and our teams work every day to put that power in consumers’ hands and earn a place in their hearts and homes. However, despite the lack of long-term history, I believe that Kenvue can be considered a company that at least meets estimates going forward. After all, the consumer staples company’s sales and earnings are not really cyclical. In its press releases, Kenvue refers to itself as the world’s largest pure-play consumer health company by revenue. By comparison, closer peer Colgate Palmolive Company (CL) reported net sales of $18.0 billion for 2022.

Furthermore, they expect amplified innovation through demand generation activities with consumers to positively impact results in the second half of the year as well, eventually driving the share price higher. If you’re a long-term investor, I think Kenvue’s price presents a great buying opportunity. Wall Street also rates the stock a buy, with a price target of $23.36 and a high of $26. But for a consumer staple company like KVUE, I think the current valuation of $19.33 a share is attractive, considering a lot of consumer staples trade upward of 20x – 25x earnings. Although management issued soft guidance, I think the company can see some price appreciation during the 2H of the year if rates fall and consumer confidence & demand increase. Reliable fundamental data to provide unconflicted insights into the fundamentals and valuation of private and public businesses.

Company leadership tapped Lippincott as their dedicated naming specialist with global expertise, and we embarked on a nine-month journey to create a name that would resonate with more than 20,000 employees and billions of consumers worldwide. Kenvue’s chief people officer, chief corporate affairs officer, chief technology and data officer, chief scientific officer and group presidents for different regions around the world are also from J&J. Kenvue posted $14.95 billion in sales for 2022 and a net income of $1.46 billion on a pro forma basis. Kenvue is profitable and expects modest growth over the next few years, the company said in the filing.

About KVUE Stock

But, with net sales growing 3.3% to $15.4 billion from last year, all in all, 2023 was a solid year for the company. Only our “novel database” enables investors to overcome those flaws and apply reliable fundamental data in their research. In other words, this IPO will take investors’ money while giving them almost no voting power or control of corporate governance.

This will likely drive earnings growth while decreasing the amount of cash flow required to sustain the dividend. In turn, this will allow the company to grow the dividend for the foreseeable future. As shown in Figure 6, Kenvue’s R&D spending is declining in relative terms – and this obviously cannot be attributed to disproportionately strong sales growth.

On the other hand, if a company in a medical device ETF sees a major gain, that increase will also be muted for ETF investors. That’s why some investors prefer to take their chances by adding individual stocks to their portfolios. ETFs are similar to mutual funds and trade on exchanges like any other standard stock. ETFs are appealing because they give investors the ability to hone in on a specific market area without investing in individual companies. One of the most significant differences between the European and North American healthcare tech markets involves valuation. Medical startups in North America tend to receive significantly higher valuations than they would in other markets.

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People expect companies to care about the things they care aboutSocietal challenges are not going away, and neither is bias (as long as we are humans, we will have bias). People want companies to play an increasingly active role in addressing equity issues. This article includes content from CLEO Diagnostics, licensed for the purpose of publishing on Investing News Australia. It is your responsibility to perform proper due diligence before acting upon any information provided here. Cleo has completed the design transfer of the CXCL10 active ratio test into a more rigorous laboratory environment, ensuring the capability to deliver reproducible and reliable results. This advancement enhances the performance of the test, transitioning it from academic methodologies to a compliant and robust laboratory setting.

As a provider of some of the largest consumer health products in the world, Kenvue generated nearly $15 billion in revenue in 2022 and $2.3 billion in net operating profit after tax (NOPAT). In 2022, NOPAT was up https://g-markets.net/ 8% year-over-year (YoY) while revenue was down 1%, per Figure 1. Kenvue (KVUE), the consumer health spin-off from Johnson & Johnson
JNJ
, is expected to start trading May 4, 2023 at a ~$40 billion valuation.

So if CEO Mongon is able to maintain the Johnson & Johnson culture at Kenvue, I see no reason why the company should not be similarly unproblematic from an earnings performance perspective. Of course, the recession-resistant business model and low demand volatility also contribute their share. S&P Dow Jones Indices announced its intent to add Kenvue to the S&P 500 index effective prior to the opening of trading on August 25, 2023. Samuel O’Brient has been covering financial markets and analyzing economic policy for three-plus years.