✍ 30 May, 2023 - 14:57
- RBC Capital Markets analyst Nik Modi initiated coverage on Kenvue Inc (NYSE:KVUE) with an Outperform rating and a price target of $29.
- Kenvue is Johnson & Johnson’s (NYSE: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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