Benzingaยท2025-11-03 20:56Core Viewpoint - Kimberly-Clark Corporation's acquisition of Kenvue Inc has raised concerns among shareholders due to Kenvue's ongoing legal issues related to its flagship product, Tylenol [1][3]. Deal Overview - The acquisition is a cash and stock transaction valuing Kenvue at approximately $48.7 billion, with an acquisition multiple of about 14.3 times Kenvue's last twelve months adjusted EBITDA [2]. Legal and Branding Concerns - The primary concern surrounding the acquisition is Kenvue's branding and legal challenges, particularly allegations that acetaminophen, the active ingredient in Tylenol, may increase the risk of autism and attention disorders in children [3]. - Texas has filed a lawsuit against Kenvue and Johnson & Johnson for allegedly misleading pregnant women about the safety of Tylenol, although the lawsuit has methodological issues regarding correlation and causation [4][5]. Market Analysis - KMB stock has shown a distinct 3-7-D formation in the trailing 10 weeks, indicating three up weeks followed by seven down weeks, with a potential bullish opportunity as price clustering is expected around $107, representing a 3.78% positive delta [12][13]. - A quantitative approach to trading suggests a 105/110 bull call spread as an intriguing trading idea, with a maximum profit potential of over 138% if KMB stock rises above $110 at expiration [17][18].