On Friday, Citi analysts adjusted their outlook on Kenvue Inc (NYSE:KVUE), increasing the price target to $24.50 from the previous $22.00, while maintaining a Neutral rating on the stock. Currently trading at $24.06, InvestingPro analysis indicates the stock is slightly overvalued despite its impressive 13.81% year-to-date return. The revision followed Kenvue’s first-quarter results for 2025, which were more favorable than anticipated, and the announcement of a new Chief Financial Officer (CFO).
Kenvue reported a smaller operational sales growth (OSG) decline of -1.2% compared to the -2.4% consensus. Earnings per share (EPS) also surpassed expectations, coming in at $0.23 versus the consensus estimate of $0.24. The company maintains strong fundamentals with an impressive 58.14% gross profit margin. Despite these positive outcomes, Kenvue reiterated its OSG guidance for the year 2025 but lowered its EPS guidance. The lowered EPS outlook reflects the impact of tariffs, with a gross effect of approximately $150 million, translating to a 100 basis point reduction in gross margin or a 5% decrease in EPS, even after considering offsetting measures. InvestingPro subscribers can access 8 additional key insights about Kenvue’s financial health and growth prospects.
In a management shake-up, Kenvue announced a CFO transition, appointing a former Kellanova (NYSE:K) executive to replace Paul Ruh. This change, along with the first-quarter performance, prompted a roughly 4% rise in Kenvue’s stock price. The market appears to link the management change to potential strategic actions within Kenvue, especially in light of the involvement of three activist investors.
The Citi analyst noted that while the first quarter of 2025 results were better than expected, the outlook for the second quarter appears softer. This is partly due to a delayed start to the allergy season and anticipated continued destocking. Furthermore, Kenvue’s guidance is heavily reliant on a stronger performance in the second half of the year.
Concluding the analysis, the Citi analyst stated, "While 1Q25 results were better than we expected, we note 2Q25 looks a bit softer with a later start to the allergy season and continued expected destocking, and KVUE guidance remains very H2-weighted. Net, we remain Neutral-rated but raise our TP to $24.5 on ~21.5x our unchanged $1.14 CY™25E EPS." With the next earnings report scheduled for July 17, 2025, InvestingPro subscribers can access comprehensive valuation metrics and detailed financial analysis through the exclusive Pro Research Report, helping investors make informed decisions ahead of important market events.
In other recent news, Kenvue Inc. reported its first-quarter 2025 earnings, surpassing analysts’ expectations with an adjusted earnings per share of $0.24, slightly higher than the forecast of $0.23. The company also exceeded revenue forecasts, reporting $3.74 billion compared to the anticipated $3.68 billion. Kenvue maintains a 2-4% organic sales growth outlook for 2025, despite a 1.2% decline in organic sales year-over-year in the first quarter. The company is focusing on innovation and supply chain resilience to navigate challenges such as supply chain disruptions and currency fluctuations.
Kenvue’s strategic focus includes enhancing brand trust and efficacy, with Tylenol gaining market share for the 11th consecutive quarter and Neutrogena maintaining its top position in face care. The company also announced a CFO transition, with Amit Banati set to join as the new Chief Financial Officer on May 12. Analysts from firms like Goldman Sachs and UBS have shown interest in Kenvue’s strategic pricing investments and innovation plans in the U.S. market. The company is implementing measures to mitigate the impact of tariffs, estimated to have a $150 million effect primarily from Canada and China.
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