J&J said it launched a roadshow for the IPO of more than 151 million shares of common stock. Kenvue plans to meet with prospective investors as early as Monday, sources familiar with the matter told The Wall Street Journal. Nor is there really an argument for substantial near-term multiple expansion toward the likes of Procter & Gamble (PG) or even Kimberly-Clark (KMB), the latter of which trades at 21.5x 2023 consensus EPS. Based on what we can tell – we no doubt will get much more information as the year rolls on – valuation here is reasonable. And for a business that is probably looking at high-single-digit EPS growth, valuation is more important than it would be for a faster-growing company where above-expectation business performance improvements can allow the underlying stock to outrun near-term valuation questions.
J&J will generally be able to control matters that shareholders vote on, such as the election of directors to Kenvue’s board, the filing said. Until then, Kenvue will qualify as a “controlled company” under the corporate governance rules of the NYSE, the filing said. That will allow Kenvue to avoid certain listing standards, including a requirement that the company’s board be composed of a majority of independent directors. Meanwhile, Kenvue is chock full of household names familiar to investors and the larger public, such as Tylenol, Band-Aid, Listerine, Aveeno, Neutrogena, and J&J’s namesake baby powder and shampoo. We’re driven to win for those we serve, and when we care fiercely for them and one another, we can deliver the best possible care.
- In fact, Kenvue’s return on invested capital (ROIC) ranks nearly last among its competition.
- The startup was recently granted the prestigious Alex Casta Audience Award via the EIT Health Catapult 2023 competition.
- In other words, a happier and more educated population means more innovation — and more innovation means more ground-breaking technology.
- The company must also have a history of stable cash flow dating back at least several years while only marketing and distributing its technology on a strictly regional basis.
- At its expected valuation, KVUE looks fully valued and does not provide investors with much upside potential, as I’ll illustrate with my reverse discounted cash flow (DCF) model below.
$25 looks about right for KVUE; investors looking for better returns likely will need a cheaper price. The market knows roughly when the spin is coming (J&J has essentially no incentive to push it off), and will know ahead of time precisely when it will occur. It does not seem likely that KVUE plunges based on the spin, which to some extent should already be priced in. Now, all investors, not just Wall Street insiders, can access trustworthy research on the earnings and valuation of stocks, bonds, ETFs, and mutual funds. Elite money managers, advisors and institutions have relied on us to lower risk and improve performance since 2004. In 2022, Kenvue generated 55% of its revenue in regions outside of the United States.
Realize the extraordinary power of everyday care
Goldman Sachs, JPMorgan Chase and Bank of America are the leading underwriters for the IPO, the company said in its preliminary prospectus filed with the Securities and Exchange Commission. Kenvue estimates the IPO will generate net proceeds of around $3.15 million, the filing said. Those proceeds and any profits from related debt-financing transactions will go to J&J.
Kimberly-Clark, meanwhile, is using this information to better identify valuable loyalty opportunities and potential product missteps. 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.
Strong leadership is crucial to ensure the company continues moving in the right direction. Finally, it must be based in the European Union to avoid a potential arbitrage situation. Due to the factors described above, some of the best healthcare technologies in the world originate in Europe. The best way to answer that question is by reviewing some of the innovations and startups currently gaining traction in the EU.
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. It is a global leader at the intersection of healthcare and consumer goods, with a portfolio of iconic brands, operating in some of the most attractive categories in consumer health.
Of the 94 Medtronic locations our company tracks around the world, 19 of them already have on-site solar generation. And there are 18 more projects we hope to complete in the near-term, said Daniel Sterner, a 20-year employee who leads our global energy, water, and utility infrastructure. Lastly, although some investment firms have begun directing their attention to Europe, many startups in the region still lack the capital to take their technology to North America. While they would undeniably benefit from access to a new crop of potential investors, it’s generally more cost-effective to continue developing their technology.
Both the cats and their owners are generating first-party data for Nestle Purina; while Donovan said it’s still early days, they expect to learn more about consumer behavior at home based on their pet’s behaviors. There are 50 data scientists dedicated to her operations organization, and they work as a trio with their functional leads and IT to continue feeding transactional data into the company’s data lake. The groups of data scientists, formed in Agile pods, go on weekly sprints and report out to the Kraft Heinz cross-functional leadership team on a quarterly basis. The spinoff, which would be valued at around $40 billion at that share range, could be the largest IPO in a subdued U.S. market for such offerings year to date. Not all brands below are marketed or sold by Kenvue in the United States, and this is not a full list of all brands sold globally by Kenvue. The idea that spin-offs can provide buying opportunities dates back, at least, to Joel Greenblatt’s You Can Be A Stock Market Genius, published in the late 1990s.
Johnson & Johnson appoints Larry Merlo as Non-Executive Chair Designate of new consumer health company
Our Healthy Lives Mission strives to advance the well-being of both your health and the planet’s health. We’re working to improve the sustainability of our products, packaging and operations to build lasting positive change for people, communities and the one planet we call home. From best practices to best-in-class products, we learn, test, partner and optimize.
This strong, distinctive color works in harmony with the multicolored palette of the company’s portfolio of well-known brands. “We believe that daily self-care rituals add up over time and have a profound cumulative impact on your wellbeing. This is the extraordinary power of everyday care. And our work is to put that power into the hands of consumers around the world,” Mongon adds. Paul Ruh, J&J’s chief financial officer of consumer health and a former PepsiCo executive, will serve as CFO, and Meredith Stevens, J&J’s worldwide vice president of the company’s consumer health supply chain department, will serve as COO. Thibaut Mongon, J&J’s executive vice president and worldwide chair of consumer health, will serve as CEO of the newly public company. And products in the essential health division, including baby products, mouthwash and dental rinses, sanitary protection and wound care, saw $4.6 billion in net sales, representing 31% of all-in revenue.
Whether you agree or disagree with my conclusions, I always welcome your opinion and feedback in the comments below. And if there’s anything I should improve or expand on in future articles, drop me a line as well. As always, please consider this article only as a first step in your own due diligence.
I’m Putting My Cash Stockpile to Work on These 3 Stocks
The $700 million settlement for ongoing litigation about its talc-based baby powders, has impacted the company’s financials and consumer confidence. However, this settlement is viewed as a strategic move to proactively manage future costs and minimize long-term damage. In my view, the safety of the parent company’s dividend has not changed with the separation of the Consumer Health business and in the midst of the ongoing talc process for ifc markets review the reasons mentioned above. Figure 7 shows my estimate of the amount of cash flow “lost” as a result of the split-off (red) and the annual dividends paid to shareholders. What at first glance looks a little worrying, especially when you consider the additional cost of litigation, should be looked at more closely. In addition, JNJ is still struggling with talc-related litigation that will likely cost the company at least $10 billion.
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The flipside, admittedly, is that Kenvue may have a bit more room for improvement. Most notably, its Skin Health and Beauty segment posted a hugely disappointing 2022. Segment adjusted operating profit fell 19% year-over-year, which the prospectus attributes to both a shortage of and higher prices in silicone. Margins in the segment last year were just 16%; those seem far too low given both recent performance for Kenvue and the industry’s general pricing power. Skin Health and Beauty did show some strength in Q1, with revenue up almost 10% and adjusted operating profit jumping 18%. But particularly with a pop from last month’s initial public offering price, it’s tough at the moment to make the case that KVUE is particularly compelling.
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 https://forex-review.net/ from J&J. Overall, Kenvue said 2022 sales were “well balanced” across the company’s three business divisions. Ten of Kenvue’s brands had approximately $400 million or more in sales last year.
Kenvue posted $14.95 billion in sales for 2022 and a net income of $1.46 billion on a pro forma basis. For the first quarter, which ended April 2, Kenvue estimates it raked in sales of $3.85 billion and net income of around $330 million. Kenvue is profitable and expects modest growth over the next few years, the company said in the filing.
