Kenvue Inc. (KVUE) is positioning itself for sustained growth through portfolio rationalization, operational efficiency, and strong brand equity in the global health and wellness sector. The company’s recent financial performance and strategic initiatives suggest meaningful upside potential for investors.
- Adjusted EBITDA reached $1.7 billion in fiscal 2024, up 8% YoY
- Operating margin target of 25% by 2026, up from 21.5% in 2024
- Share repurchase program of $1.2 billion in 2024
- Forward EV/EBITDA multiple of 8.2x, below sector median of 10.5x
- International sales grew 13% in 2024, with e-commerce contributing 22% of total revenue
- Institutional ownership increased to 68% in Q4 2024
Kenvue Inc. (KVUE), the standalone consumer health company formed from the spinoff of Johnson & Johnson’s consumer business, is demonstrating signs of transformation into a leaner, more agile enterprise. Since its public debut in 2023, KVUE has focused on divesting underperforming assets and reinvesting in high-growth categories like oral care, skin health, and women’s wellness. The company reported adjusted EBITDA of $1.7 billion in fiscal 2024, up 8% year-over-year, driven by disciplined cost management and category-leading brands such as Neutrogena, Orajel, and Aveeno. The bull case centers on KVUE’s path to improved profitability and capital allocation. Management has set a target to achieve at least 25% operating margin by 2026, up from 21.5% in fiscal 2024, through supply chain optimization and marketing efficiency. Additionally, the company repurchased $1.2 billion in shares during 2024, signaling confidence in its intrinsic value and providing a tailwind to EPS growth. With a current enterprise value of approximately $115 billion, KVUE trades at a forward EV/EBITDA multiple of 8.2x, below the sector median of 10.5x, suggesting potential undervaluation. The company’s international expansion, particularly in Asia-Pacific and Latin America, is a key growth driver. Sales in emerging markets rose 13% in 2024, outpacing the U.S. performance of 5%. Brands like Clean & Clear and Tucks are gaining traction in these regions due to rising health consciousness and increasing disposable income. Furthermore, KVUE’s investment in digital engagement and direct-to-consumer channels has contributed to a 19% increase in e-commerce revenue, accounting for 22% of total sales. Market participants are increasingly recognizing KVUE’s strategic pivot, with institutional ownership rising to 68% in Q4 2024, up from 55% in 2023. Analysts have upgraded the stock 14 times in the past 12 months, and the consensus price target now stands at $78, representing a 16% upside from current levels. The stock’s resilience during the broader consumer staples sector downturn further underscores confidence in its long-term trajectory.