Kenvue (KVUE) is under pressure after activist investor Starboard Value acquired a stake in the company. According to the Wall Street Journal, the hedge fund has taken a significant stake in KVUE and is pushing for strategic changes to boost its share price. While KVUE has gained 15% over the past year, it has lagged behind the S&P 500 Index (SPX), which has risen more than 39%.
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Kenvue, which spun off from Johnson & Johnson (JNJ) in May 2023, is recognized for well-known consumer brands such as Band-Aid, Listerine, and Tylenol. Since its public debut, the company has faced several challenges, including rising costs, heightened competition from private-label brands, and a slowdown in consumer spending.
Starboard’s Activist Push for Kenvue’s Growth
It’s important to note that Starboard, recognized for its activist investment approach, has a strong track record of working with companies to create value. Its recent investment in Kenvue indicates confidence in the company’s potential and the necessity for strategic changes.
Starboard may put pressure on the company to reevaluate the positions of its brands and their pricing strategies. This could help boost profitability and enhance shareholder value.
Is KVUE a Good Investment?
Turning to Wall Street, KVUE stock has a Moderate Buy consensus rating based on five Buys and four Holds assigned in the last three months. At $23.88, the average Kenvue price target implies a 9.94% upside potential.
