Kenvue Inc. (NYSE:KVUE) is one of the stocks on Jim Cramer’s radar recently. During the lightning round, a caller asked if long-term shareholders should be worried. Here’s what Mad Money’s host had to say in response: “Okay, it’s a really important question because I’ve been looking to buy Kimberly. I think the answer is no. I think you’ll be fine. There’s going to be lawsuits. We’ve dealt with them before. Look at Johnson & Johnson… I think it is a good situation, not a bad one.” A person with stock m ...

Group 1 - Starboard Value, a hedge fund with $9 billion in assets, has a history of activist investing, notably with Darden Restaurants, which led to significant changes in the company's management and strategy [1][2][20] - The firm is currently targeting companies like Ken View and Corvo, aiming to improve their operational efficiency and unlock shareholder value [2][20] - Activist investing has made corporate America more responsive, with companies acting faster to improve performance due to the pressure from activist investors [19][20] Group 2 - The CEO of Starboard Value, Jeff Smith, emphasizes the importance of understanding a company's inner workings to identify areas for improvement [4][7] - The firm looks for companies with lower margins and multiples compared to peers, believing that there are no structural disadvantages preventing them from performing better [23][45] - The approach involves engaging with management teams to foster open dialogue about strategic improvements, which can lead to better business outcomes [15][49] Group 3 - The merger between Ken View and Kimberly Clark is viewed positively, as both companies have complementary organizational structures that can enhance operational efficiency [36][38] - Concerns regarding Tylenol's brand trust due to past controversies are acknowledged, but the overall business is expected to remain stable [41][42] - Starboard Value's involvement in companies like Salesforce has led to improved profit margins and operational performance, despite broader market pressures [34][35]

Core Viewpoint - Kenvue, the consumer healthcare spin-off from Johnson & Johnson, has seen its stock price decline significantly, currently around $15, which is over 65% lower than its highs in 2023, raising questions about whether this represents a long-term buying opportunity or a value trap [2] Company Performance - Kenvue has issued cautious guidance indicating lower-than-expected profit growth due to currency challenges and a decline in demand for cough and cold products [3] - The company has undergone a leadership change with CEO Thibaut Mongon resigning as part of a strategic review [3] - Kenvue is involved in a lawsuit in the U.K. concerning alleged asbestos contamination in baby powder, which has revived investor concerns related to Johnson & Johnson's ongoing talc litigation [3] - Negative news linking Tylenol to developmental issues in children has unsettled retail sentiment, despite the claims being unverified [3] Financial Fundamentals - Kenvue controls a strong consumer health portfolio with globally recognized brands such as Tylenol, Motrin, Neutrogena, Aveeno, and Listerine, which have strong pricing power and consistent demand [4] - The company generates over $1.6 billion in annual free cash flow, has moderate debt levels, and maintains operating margins around 17%, providing financial flexibility [4] Valuation Insights - Kenvue's market value is approximately $27 billion, trading at a lower valuation than competitors like Haleon and Procter & Gamble's health division [5] - Earnings growth in 2025 is expected to be modest, but a strategic update from management could improve sentiment if it indicates credible plans for margin improvement or brand portfolio streamlining [5] Investor Sentiment - Legal and reputational issues are expected to persist, and the CEO's departure introduces uncertainty regarding execution [6] - Until there is clarity on liability from the courts and a long-term strategy from new leadership, the stock may struggle to see significant re-rating [6] - Kenvue appears fundamentally undervalued but faces sentiment challenges, making it potentially appealing for long-term investors seeking stable cash-flow exposure in the consumer healthcare sector [7] - A cautious approach may be advisable in the near term, waiting for signs of a market bottom and clearer direction from management [7] Long-term Outlook - Over a 12- to 24-month outlook, Kenvue's brand strength and cash flow generation suggest that the current sell-off could represent a buying opportunity rather than a permanent decline [8]

Group 1 - Kenvue is the largest pure-play consumer health company globally, spun off from Johnson & Johnson in 2023, inheriting a strong product lineup [2] - Kenvue has a notable history as a Dividend King, with 63 consecutive annual dividend increases and a forward dividend yield exceeding 5.1% [3] - Despite its dividend strength, Kenvue's stock performance has been poor, with weak revenue growth and a significant decline in profits since becoming a standalone entity [3] Group 2 - Kenvue experienced a leadership change in July, appointing Kirk Perry as interim CEO following the departure of Thibaut Mongon [4] - The company faced a public relations crisis due to claims linking Tylenol use during pregnancy to autism, which Kenvue and several healthcare organizations quickly refuted [5] - Analysts from Bank of America and JPMorgan Chase suggest that Kenvue's stock may have upside potential of approximately 29%, with a total return exceeding 34% over the next 12 months if dividends are maintained [6]

Core Viewpoint - Kenvue, a newly public company and a Dividend King, faces significant challenges in its operations and financial performance, raising concerns about its ability to maintain its dividend status in the current economic environment [2][14]. Company Overview - Kenvue became publicly traded in August 2023 after being spun off from Johnson & Johnson, inheriting its Dividend King status due to a history of consistent dividend increases [4]. - The company focuses on managing well-branded over-the-counter health products, including popular brands like Tylenol, Motrin, and Neutrogena, rather than developing novel pharmaceuticals [5]. Financial Performance - In the second quarter, Kenvue reported a 4% year-over-year decline in net sales, totaling $3.8 billion, with adjusted earnings per share falling to $0.29 from $0.32 in the previous year [8]. - All three business segments of Kenvue experienced declining sales during this period [8]. Strategic Challenges - The split from Johnson & Johnson was driven by slow and inconsistent revenue growth in the consumer health division, a trend that Kenvue has not reversed since going public [9]. - Kenvue is undergoing a leadership change, with a new interim CEO appointed as the company seeks a permanent replacement, part of a broader strategic review aimed at improving performance [11]. Cost Management Efforts - The company aims to achieve $350 million in cost savings by 2026, having already reduced its workforce by 4% [12]. Regulatory and Market Concerns - Recent allegations linking Tylenol to increased autism risk have contributed to a significant drop in Kenvue's stock price, with approximately half of a 13% decline attributed to this announcement [13]. Dividend Sustainability - Kenvue's current dividend payout ratio stands at 112% based on earnings and 97% based on free cash flow, indicating potential sustainability issues for its dividend payments [14].

Group 1 - The article discusses the worst-performing stocks in the S&P 500 index for September, highlighting significant declines in share prices [1][8]. - CarMax experienced a 24.8% drop in stock value due to disappointing second-quarter results, with revenue and profits down by 25% year over year, reflecting decreased consumer enthusiasm for car purchases [3]. - FactSet Research Systems saw a 22.3% decline, attributed to results that fell below analyst expectations [4]. - Kenvue's stock fell by 21.9%, influenced by negative public perception regarding Tylenol's alleged link to autism following statements from public figures [5]. - Deckers Outdoor's shares decreased by 17.5%, impacted by concerns over tariffs and economic uncertainty, along with disappointing earnings reports [6]. - Synopsys experienced a 16.7% decline due to weakened demand from a major customer and previous export restrictions, which have since been lifted [7]. Group 2 - Despite the declines in these stocks, the S&P 500 index gained 3.5% in September, indicating a broader market resilience [8]. - The article suggests that while some stocks may have fallen due to temporary issues, they could present buying opportunities if the market has overreacted and the company's future remains promising [8][9]. - The Motley Fool Stock Advisor analyst team has identified ten stocks they believe are better investment options than CarMax, indicating a shift in investor focus [10].

Core Viewpoint - Kenvue faces significant regulatory and reputational challenges due to unsubstantiated claims linking acetaminophen to autism during pregnancy, which threatens its Self-Care segment revenue [1][2] Company Overview - Kenvue, a consumer health company spun off from Johnson & Johnson in 2023, is defending the safety of acetaminophen, asserting that over a decade of research shows no credible evidence linking it to autism [2] - The company has experienced a market capitalization of $34 billion, but its stock has declined approximately 20% in 2025 due to concerns over market share erosion and litigation risks [4] Financial Performance - In Q2 of 2025, Kenvue reported a 4.2% decline in organic sales, with adjusted earnings narrowing from $0.32 per share to $0.29 per share over the last 12 months [5] Leadership Changes - Recent leadership changes, including the appointment of interim CEO Kirk Perry, who has over 30 years of experience in consumer packaged goods and technology, provide cautious optimism for the company's future [6] - The new leadership indicates a strategic pivot towards operational excellence and consumer-centric execution [6]