Core Insights - Kenvue Inc. is a consumer health company with a market cap of $28.7 billion, operating in various segments including Self Care, Skin Health and Beauty, and Essential Health, and owns well-known brands like Listerine and Tylenol [1] Financial Performance - Kenvue is expected to report an adjusted EPS of $0.27 for Q3, a decrease of 3.6% from $0.28 in the same quarter last year, but has a strong history of meeting or exceeding earnings estimates [2] - For fiscal 2025, Kenvue's adjusted EPS is projected to be $0.99, down 13.2% from $1.14 in 2024, with a rebound expected in fiscal 2026 to $1.12 per share, reflecting a 13.1% year-over-year increase [3] Stock Performance - Kenvue's stock has declined by 33.8% over the past 52 weeks, significantly underperforming the Consumer Staples Select Sector SPDR Fund's 2.8% dip and the S&P 500 Index's 14.5% gain during the same period [4] - Following the release of mixed Q2 results, Kenvue's stock gained 1.5%, despite a 4.2% drop in organic sales and an overall topline decline of 4% year-over-year to $3.8 billion, which missed expectations [5] Analyst Sentiment - Analysts maintain a consensus "Moderate Buy" rating for Kenvue, with six "Strong Buys," nine "Holds," and one "Strong Sell" among 16 analysts, and a mean price target of $20.36 indicating a 34% upside potential from current levels [6]

Core Viewpoint - Kenvue is facing significant challenges, including legal issues related to its talc-based baby powder and recent accusations regarding its Tylenol product, which the company is actively contesting [1][2]. Company Overview - Kenvue is a consumer health company with a diverse portfolio of well-known brands, serving approximately one billion consumers across 165 countries, and has a market capitalization of about $28.7 billion [3]. - The stock has experienced a decline of over 22% in the past two years and 30% year-to-date, despite offering a dividend yield of 5.4%, which is more than double the sector median of 2.5% [3]. Financial Performance - Kenvue's revenue and earnings have decreased over the past year, with a consistent decline in earnings over the last two years [6]. - Despite the negative sentiment, Kenvue has shown resilience by beating earnings estimates, reporting earnings per share of $0.29 against an estimate of $0.28 in the most recent quarter [6]. Dividend Sustainability - The sustainability of Kenvue's dividend is in question due to a high payout ratio of nearly 75% and declining earnings, which limits growth potential [4].

Core Viewpoint - Billionaire activist investor Jeff Smith remains optimistic about Kenvue (KVUE) despite a 28% year-to-date stock decline, primarily due to management changes he facilitated [1] Management Changes - Significant leadership transitions occurred, with former CEO Thibaut Mongon ousted in July and interim CEO Kirk Perry appointed, alongside Amit Banat as CFO in May [1][2] - Smith expressed satisfaction with the rapidity of these changes, indicating potential improvements in Kenvue's brands and business lines [2] Brand Controversy - Kenvue's stock struggles are linked to controversial claims from the Trump administration connecting Tylenol use during pregnancy to autism, leading to a 10% drop in shares following reports of upcoming findings from Health and Human Services Secretary Robert F. Kennedy Jr. [3] - Kenvue has actively urged regulators to dismiss citizen petitions for autism warning labels, with a federal judge previously dismissing similar lawsuits due to lack of scientific evidence [4] Financial Performance - During the Q2 earnings call, interim CEO Kirk Perry outlined a turnaround strategy while acknowledging operational challenges, with Kenvue reporting a 2.7% sales decline in the first half of the year and maintaining guidance for low single-digit revenue declines for 2025 [5] - Key issues identified include excessive complexity in product lines, insufficient consumer insight focus, and poor retail and e-commerce execution [6] Strategic Review - Perry noted that Kenvue has too many products across various markets without adequate strategic focus, prompting the board to initiate a comprehensive review of strategic alternatives, including potential brand portfolio reshaping [7] - Retail inventory destocking and weak seasonal product performance, along with underwhelming operations in China, have negatively impacted results, although easier comparisons are expected in Q4 [8]

Core Thesis - Kenvue Inc. is viewed as a potential buying opportunity due to its undervaluation following a market overreaction to unfounded claims regarding acetaminophen [1][4]. Company Overview - Kenvue Inc.'s share price was $16.23 as of September 30th, with trailing and forward P/E ratios of 21.89 and 14.81 respectively [1]. - The stock is currently trading at approximately 12 times 2028 earnings, representing a nearly 46% discount compared to consumer staples peers at around 17.5 times [4]. Market Reaction - Following controversial comments made by Donald Trump regarding acetaminophen, shares of Kenvue fell roughly 10% to new all-time lows [3]. - Medical experts criticized Trump's statements, emphasizing the safety of acetaminophen during pregnancy and the risks of untreated pain or fever [3]. Investment Opportunity - The disconnect between Kenvue's long-standing safety record and the market's reaction has created a potential buying opportunity [4]. - The strong fundamentals, wide consumer reach, and proven safety profile of acetaminophen suggest that accumulating shares during this weakness offers an attractive risk/reward scenario [4].

Core Investment Thesis - Starboard Value's CEO Jeff Smith discussed investment opportunities in the construction industry, particularly focusing on a company named Floor, which is well-positioned due to reduced competition and improved contract quality [1][5][6] - The company has a strong management team and is expected to benefit from the ongoing reindustrialization in the U.S. [6][8] Company Performance and Valuation - Floor's enterprise value is approximately $6 billion, with its stake in New Scale valued at around $5 billion, indicating a significant portion of its value is tied to this investment [7] - The core business of Floor is undervalued, trading at about three times earnings, which is considered too cheap for a growing company [8] Strategic Recommendations - Starboard Value advocates for Floor to monetize its stake in New Scale to unlock value for shareholders, suggesting either a sale or other monetization strategies [9][11] - The management's commitment to enhancing shareholder returns through the New Scale investment has been acknowledged, but there is a call for a clearer separation of this stake from the core business [10][12] Ken View Investment Insights - Ken View, another investment by Starboard, has faced challenges, including a significant stock decline of 32% over the last six months [16] - Despite the downturn, the company possesses strong consumer health brands and is undergoing management changes, including a new CEO and CFO, while exploring strategic alternatives [15][18]

Carl, thank you. Uh, joining us now exclusively here at the Active Passive Summit is one of Wall Street's most influential activists. Starboard Values CEO Jeff Smith just unveiled his latest investment ideas here at the conference as well.And uh, we'll talk about all of those. Let's uh, well, first of all, thanks. It's our annual tradition.I appreciate you keeping it up. >> Yeah, thank you, David. It's nice to be here.>> You seem thrilled. >> Thrilled. >> Love being here.>> You talked about three different ...

Core Viewpoint - Kenvue has requested U.S. regulators to deny a petition that seeks to issue a warning regarding the potential autism risk associated with its over-the-counter pain medication Tylenol when used during pregnancy [1] Group 1 - Kenvue is advocating against the warning request, emphasizing the safety profile of Tylenol [1] - The petition for the warning suggests concerns about the medication's use during pregnancy and its potential link to autism [1]

Company Overview - Kenvue is a consumer health products company that emerged from Johnson & Johnson's former consumer healthcare business, officially becoming a stand-alone public company in 2023 [4] - The company owns a portfolio of well-known brands including Tylenol, Band-Aid, Aveeno, Neutrogena, and Listerine, focusing on self-care, skin health, beauty, and essential health [5] - Kenvue reported nearly $15.5 billion in sales and over $1 billion in profit last year, indicating its significant market presence [5] Current Challenges - Kenvue's shares have declined more than 20% this year, primarily due to concerns linking Tylenol to autism, which has negatively impacted investor sentiment [2] - The company is currently facing various challenges but has a new leadership team in place to help navigate these issues [8] Future Potential - Despite current struggles, Kenvue is expected to recover, with potential catalysts for growth identified for 2026 [3] - The company has been consistently innovating, launching over 100 new product innovations annually since 2020, which could enhance its market position [6] - Johnson & Johnson anticipated that Kenvue would achieve improved profit margins and growth as an independent entity, with more flexibility for acquisitions [7]

Core Insights - American Express shares increased after the company reported strong quarterly results that exceeded analysts' expectations and raised its outlook due to increased customer usage of its high-end credit cards [2][6]. Group 1: Market Performance - Major U.S. equity indexes rose at midday on Friday, with regional bank stocks recovering from previous losses following a series of corporate earnings reports [1][6]. - Kenvue was the top performer in the S&P 500 as investors capitalized on a dip in its stock price after a lawsuit in the U.K. claimed its baby powder caused cancer [2]. - Truist Financial also reported better-than-expected results, driven by higher wealth management fees and interest income, leading to a rise in its share price [3]. Group 2: Sector Movements - Shares of Newmont and other gold miners declined as the price of gold, which had been reaching record highs, experienced a pullback [3]. - U.S.-listed shares of Novo Nordisk and Eli Lilly fell after comments from President Trump regarding potential price reductions for popular weight-loss drugs [3][6]. Group 3: Economic Indicators - The yield on the 10-year Treasury note and oil futures saw slight increases, while the U.S. dollar strengthened against the euro and pound but weakened against the yen [4].

Group 1 - Major U.S. equities indexes, including the Dow, S&P 500, and Nasdaq, experienced gains as regional bank stocks rebounded following a series of corporate earnings reports [2][5] - American Express shares rose after the company reported quarterly results that exceeded analysts' expectations and improved its outlook due to increased customer usage of its high-end credit cards [3][5] - Truist Financial also reported better-than-expected results driven by higher wealth management fees and interest income, resulting in a rise in its share price [3] Group 2 - Shares of Newmont and other gold miners declined as the price of gold, which had been reaching record highs, experienced a pullback [4] - U.S.-listed shares of Novo Nordisk and Eli Lilly fell after comments from President Trump indicated intentions to reduce prices for popular weight-loss drugs [4][5]