# Kenvue (KVUE)

Sector: Consumer health

| Field | Value |
|---|---|
| Price | $18.62 |
| Fair value (Analysts) | $23.00 |
| Discount to fair value | 19% |
| Fair value uncertainty (Analysts) | High |
| Economic moat (Analysts) | Wide |
| LSEG analyst rating (1 strong buy to 5 strong sell) | 2.93 |
| Data as of | 2026-10-15 |
| Next earnings | 2026-11-06 (estimate) |

## In short

Kenvue's price follows the fixed terms of its sale to Kimberly-Clark, expected to close in Q4 2026, so the gap closes only if Kimberly-Clark shares rise.

## Themes and gap

- Themes: Regulation and courts (regulation-legal)
- Gap type: Will probably not close (structural)
- Why: The fixed exchange ratio ties Kenvue's price to Kimberly-Clark's shares, and the deal is expected to close in the fourth quarter of 2026 at the agreed terms, below the standalone value.

## About

Kenvue is the largest pure-play consumer health company in the world by revenue, with net sales of $15.1 billion in fiscal 2025. Johnson & Johnson separated it in 2023. It sells over-the-counter medicines and personal care products, and it makes money from the margin on these branded products, with an adjusted gross margin of about 60% in Q2 2026. The Self Care segment includes Tylenol, Motrin, Zyrtec, Benadryl and Nicorette. The Skin Health and Beauty segment includes Neutrogena, Aveeno and OGX. The Essential Health segment includes Listerine, Band-Aid, Johnson's baby products and Stayfree. It sells through retailers, pharmacies and online stores in North America, Europe, Asia Pacific and Latin America. Kimberly-Clark agreed in November 2025 to buy Kenvue, and the deal is expected to close in the fourth quarter of 2026.

## Thesis

Kenvue's price is now set by its pending sale to Kimberly-Clark. For each Kenvue share, holders will receive 0.14625 Kimberly-Clark shares and $3.50 in cash. The exchange ratio is fixed, so the Kenvue share price moves with the Kimberly-Clark share price and stays close to the value of the deal. The deal value is the value that investors give to Kimberly-Clark with Kenvue inside it, which includes the Tylenol litigation risk, a large integration and the sale of Kimberly-Clark's feminine care business in Europe that the EU requires. The analysts' fair value is a standalone value for Kenvue, and the deal does not pay it. The deal is far along. Shareholders of both companies approved it on January 29, 2026, the US antitrust waiting period ended on February 4, 2026, and the EU cleared it with conditions on October 13, 2026. Kimberly-Clark expects to close in the fourth quarter of 2026, and it does not expect the related exchange of Kenvue notes to settle before November 2, 2026. After the closing, Kenvue shares stop trading, and holders own about 46% of the combined company. The gap to the standalone value therefore probably does not close. It can close only if Kimberly-Clark shares rise, for example if the combined company shows its planned cost savings after the closing. If the deal fails, the price returns to Kenvue's standalone value, and the Tylenol litigation and slow growth weigh on it again.

## Checkpoints

- Nov 6, 2026 (estimate): Q3 2026 results: organic sales growth. Status: Pending. Watch: Positive organic sales growth and a stable adjusted operating margin pass; a return to falling sales fails.
- Q4 2026 (estimate): Closing of the Kimberly-Clark acquisition. Status: Pending. Watch: The deal closes in the fourth quarter of 2026 on the agreed terms; a new delay past 2026 or a failed regulatory approval fails.
- 2027 (estimate): Combined company: cost savings and Kimberly-Clark share price. Status: Pending. Watch: Kimberly-Clark reports cost savings on plan and its shares rise after the closing; integration problems or a lower share price fail.

## Balance sheet

- Cash: $1.1B
- Debt: $8.4B
- Net debt: $7.3B
- EBITDA, last 12 months: $3.2B
- Net debt / EBITDA: 2.3× (medium)
- Interest cover: 7.9×
- Undrawn credit line: $4.0B, to March 2029
- Debt due within 12 months: $1.4B
- Last debt due: 2063

Debt is mostly unsecured senior notes that mature from 2028 to 2063, plus commercial paper. Kenvue repaid $750 million of 5.35% notes due 2026 in the first half of 2026 and used more commercial paper, which rose to $1.4 billion at June 28, 2026 from $0.7 billion at December 28, 2025. The debt figure excludes $134 million of finance lease liabilities. Almost all cash ($1,089 million) was held by foreign subsidiaries at June 28, 2026. The $4.0 billion revolving credit facility was undrawn and runs to March 2029. EBITDA is operating income plus depreciation and amortization for the 12 months to June 28, 2026. Interest cover uses net interest expense for the first half of 2026. Kenvue has investment grade ratings from Moody's and S&P. In its exchange offer, Kimberly-Clark offers its own new notes for up to $7.0 billion of Kenvue notes, and holders gave enough consents to remove most covenants of the Kenvue notes when the offer settles. Dividends used $796 million of cash in the first half of 2026.

As of 2026-06-28.

Sources:

- https://www.sec.gov/Archives/edgar/data/1944048/000194404826000142/kvue-20260628.htm
- https://www.sec.gov/Archives/edgar/data/1944048/000194404826000141/q226earningspressrelease.htm
- https://www.sec.gov/Archives/edgar/data/1944048/000194404826000030/kvue-20251228.htm
- https://www.sec.gov/Archives/edgar/data/1944048/000095015726001094/form8-k.htm

## Recent events

- 2026-10-13: The European Commission cleared Kimberly-Clark's purchase of Kenvue on the condition that Kimberly-Clark sells its feminine care business in the European Economic Area, including Kotex, Lidie, Camelia and Record, to Dilek Gida Uretim of Turkey. On the same day, Kimberly-Clark said that Kenvue noteholders gave enough consents to amend the Kenvue indenture in its exchange offer, which expires on October 27, 2026.
- 2026-10-09: Kenvue signed a supplemental indenture that removes most covenants of its senior notes. The changes take effect when Kimberly-Clark's exchange offer for the notes settles, at about the closing of the acquisition.
- 2026-08-06: Kenvue reported Q2 2026 results. Net sales rose 3.0%, and organic sales rose 1.6%, the third quarter of growth in a row. Diluted EPS was $0.24, and adjusted EPS was $0.31, up 7%. The adjusted operating margin fell to 22.1% from 22.7% because of inflation, tariffs and higher brand support. Kenvue gave no guidance because of the pending deal, and it said that it works to close the deal in the fourth quarter of 2026.
- 2026-05-12: CFO Amit Banati left the company, as announced in February 2026. Chief Accounting Officer Heather Howlett became interim CFO.
- 2026-05-07: Kenvue reported Q1 2026 results. Net sales rose 4.5%, and organic sales rose 0.7%. Diluted EPS was $0.25, up 47%, and adjusted EPS was $0.32, up 33%.

## Risks

- High: The Kenvue price follows the Kimberly-Clark share price through the fixed exchange ratio. A fall in Kimberly-Clark shares lowers the value that Kenvue holders receive. After the closing, holders own about 46% of a combined company that must complete a large integration.
- Medium: The deal still needs some foreign regulatory approvals and other closing conditions. A delay or a failure of the deal returns the price to Kenvue's standalone value, which includes the Tylenol litigation and slow growth.
- Medium: Lawsuits claim that the use of acetaminophen (Tylenol) during pregnancy is associated with autism and ADHD. A US federal court entered judgment for the sellers in February 2024. In October 2025, the State of Texas sued Kenvue, and most claims were dismissed in November 2025, but Texas filed an appeal in December 2025.
- Low: Kenvue keeps the liability for talc products sold outside the US and Canada. Group claims about Johnson's Baby Powder started in Australia in February 2026 and in Scotland in March 2026, and Kenvue cannot yet estimate the possible cost.
- Low: Organic sales growth was only 0.7% in Q1 2026 and 1.6% in Q2 2026. Inflation and tariffs lowered the gross margin in Q2 2026.

## Links

- Page: https://picks.kamadorueda.com/company/KVUE/
- History of changes: https://picks.kamadorueda.com/company/KVUE/history/
- JSON with full history: https://picks.kamadorueda.com/data/company/KVUE.json

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