This Big New Development Could Be Bullish for Kenvue Stock

Group 1 - Starboard Value has acquired a $1 billion stake in Pfizer and is now also involved with Kenvue, aiming to improve shareholder returns after a 10.5% loss since its spinoff from Johnson & Johnson in 2023 [1][2] - Kenvue owns several well-known healthcare brands, including Neutrogena, Tylenol, and Listerine, making it a significant player in the consumer healthcare market [3] - Kenvue's annual net sales growth from 2019 to 2022 was only 3.4%, compared to a market growth rate of 4.8%, and its organic growth rate in 2023 was just 5%, lower than management's guidance [4][5] Group 2 - Starboard plans to enhance Kenvue's marketing capabilities, particularly in its underperforming skin and beauty segment, to improve growth and market share [6][7] - If management adopts Starboard's suggestions, Kenvue's growth could align with competitors, potentially improving stock valuation and enabling capital returns to shareholders [7] - The market has responded positively to Starboard's involvement, but there is a risk of public clashes with management, similar to their situation with Pfizer [8][9] Group 3 - There is skepticism about whether Starboard can significantly boost Kenvue's growth, given the nature of its business, and while changes may help reduce losses, substantial earnings growth seems unlikely without major initiatives [11] - The situation remains fluid, and the potential for a stronger investment thesis exists if Starboard's proposals are effectively implemented [12]