KVUEConsumer health

Kenvue

Wide moatHigh uncertainty

Updated today · Oct 15

Price: $18.62
Fair value: fair value $23.00
Discount: 19.0% below fair value
LSEG rating: LSEG 2.93 — lower is better (1–5)
Next earnings: Earnings Nov 6 · in 3 weeks · estimated
Gap to fair value: Structural gap: 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.

Regulation and courts

Chart History

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Second opinion (AI estimate): moat Narrow, fair value $20.81 (range $17.19 to $24.38).

How the AI estimate was made

The fair value, the moat and the uncertainty for Kenvue are an AI estimate from October 15, 2026. They are not an analyst's values. An AI research agent calculated them from the company's own filings and releases. Kimberly-Clark agreed on November 2, 2025 to buy Kenvue. Each Kenvue share will receive $3.50 in cash and 0.14625 Kimberly-Clark shares. Shareholders of both companies approved the deal on January 29, 2026, and the United States antitrust waiting period ended on February 4, 2026. The Kenvue second quarter 2026 release (8-K, August 6, 2026) expects the deal to close in the fourth quarter of 2026. On October 13, 2026, Kimberly-Clark said that the Kenvue noteholders gave their consents and that the debt exchange will not settle before November 2, 2026. The estimate assumes that the deal closes. The method values a Kenvue share as $3.50 plus 0.14625 times the value of one share of the combined company. That value is a multiple of 2027 adjusted EPS of the combined company. The Kimberly-Clark pro forma financial information (8-K, September 28, 2026) gives 616.3 million diluted combined shares, financing interest of $95 million after tax for the first half of 2026 and a combined net debt of about $18.3 billion. The Kimberly-Clark second quarter release (8-K, August 4, 2026) gives first half 2026 adjusted EPS from continuing operations of $3.40 on 333.3 million shares. The Kenvue release gives first half 2026 adjusted diluted EPS of $0.63 on 1,922 million shares, first half free cash flow of $1.0 billion and debt of $8.5 billion. The Kimberly-Clark release of October 15, 2026 gives preliminary third quarter adjusted EPS from continuing operations of $1.70 and organic sales down 1.3%. The deal release of November 3, 2025 gives expected cost synergies of about $1.9 billion within three years, revenue synergies of about $500 million and about $300 million of reinvestment. The estimate calculates first half 2026 combined adjusted net income of about $2,258 million, after the financing interest and about $20 million for required divestitures, which is an assumption. That is $3.66 per combined share, or about $7.33 a year. The base case assumes 2027 combined adjusted EPS of $7.90, with the first year of synergies, at 15 times. It gives $118.50 per combined share and $20.83 per Kenvue share. The low case assumes EPS of $7.20, with slow synergies and costs from the Tylenol litigation, at 13 times. It gives $93.60 and $17.19. The high case assumes EPS of $8.40 at 17 times. It gives $142.80 and $24.38. EPS is after interest, so the debt is already in the value. The estimate assumes weights of 25%, 50% and 25%. The weighted fair value is $20.81 per Kenvue share. The spread s is 0.17, so the uncertainty is Medium. The moat is Narrow. Intangible assets are the main source: Tylenol, Listerine, Neutrogena, Band-Aid and Aveeno are strong brands, and over-the-counter medicines need regulatory approvals, such as the new FDA approval for Tylenol with Naproxen. The combined company adds Huggies and Kleenex and gets scale in retail and supply. Kenvue organic sales grew only 1.6% in the second quarter of 2026, private label products compete on price, and the pro forma balance sheet of June 30, 2026 shows intangible assets of about $31.2 billion and goodwill of about $15.2 billion for the combined company. Switching costs and network effects are weak. For these reasons, the estimate does not give a Wide moat.

AI estimate of October 15, 2026. It is not the analysts' value.

In short

Thesis: 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.
Gap: Will probably not close. 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.
Next test: Nov 6, 2026 (estimate): Q3 2026 results: organic sales growth

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 · est.Pending
Q3 2026 results: organic sales growthPositive organic sales growth and a stable adjusted operating margin pass; a return to falling sales fails.
Q4 2026 · est.Due this quarter
Closing of the Kimberly-Clark acquisitionThe deal closes in the fourth quarter of 2026 on the agreed terms; a new delay past 2026 or a failed regulatory approval fails.
2027 · est.Pending
Combined company: cost savings and Kimberly-Clark share priceKimberly-Clark reports cost savings on plan and its shares rise after the closing; integration problems or a lower share price fail.

Every passed and failed checkpoint across all picks

Balance sheet

Cash: $1.1B
Debt: $8.4B
Net debt: $7.3B
Net debt / EBITDA: 2.3×; EBITDA $3.2B, last 12 months
Interest cover: 7.9×; times profit pays interest
Credit line: $4.0B; undrawn, to March 2029

Cash against debt

Cash$1.1B

Debt$8.4B

debt covered by cashnet debt $7.3B

Leverage: net debt / EBITDA

low, under 2×medium, 2× to 4×high, over 4×

When the debt is due

12 months$1.4B

Later$7.0B

The last debt is due in 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.

As of June 28, 2026

Show 4 sources

Risks

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.
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.
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.
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.
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.

Recent events

October 13, 2026The 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.
October 9, 2026Kenvue 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.
August 6, 2026Kenvue 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.

Show 2 older events

May 12, 2026CFO Amit Banati left the company, as announced in February 2026. Chief Accounting Officer Heather Howlett became interim CFO.
May 7, 2026Kenvue 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%.

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