Kenvue (KVUE) Stock Dives Amid Talc-Related Legal Troubles
Kenvue (KVUE) stock has experienced a significant decline, plummeting over 13% in a single day. This drop is a consequence of ongoing legal challenges linked to talc products. Kenvue, a spinoff from Johnson & Johnson (JNJ), has faced mounting pressure as a result of allegations surrounding its talc-based items.
Kenvue’s Year-to-Date Decline
So far in 2023, KVUE shares have dropped a total of 34%. The sharp decline on Thursday was more pronounced than a 9% fall earlier this month. This previous dip was triggered by a report from the Wall Street Journal regarding potential links between the pain medication Tylenol and autism risk in pregnant women, according to Health and Human Services Secretary Robert F. Kennedy Jr.
Legal Issues in the UK
Recent legal actions have intensified the scrutiny on Kenvue. A lawsuit was filed in the English High Court by KP Law, representing over 3,000 individuals. These claimants allege that their cases of ovarian cancer, mesothelioma, and other diseases stem from using JNJ’s baby powder between 1965 and 2023.
- Estimated lawsuit value: 1 billion pounds ($1.34 billion)
- Kenvue UK Limited named as a defendant
Kenvue’s Responsibility and JNJ’s Position
Johnson & Johnson has stated that Kenvue bears the liability for all talc-related litigation outside the United States and Canada. Despite these claims, JNJ maintains that its talc products are safe and free of asbestos, which has been associated with serious health issues, including mesothelioma.
Ongoing Challenges and Market Response
JNJ continues to grapple with numerous lawsuits in the U.S. involving allegations of cancer linked to its talc products. In 2020, the company ceased selling talc-based baby powder in the U.S., switching to a cornstarch alternative. This shift was mirrored in the UK in 2023.
Analyst Ratings and Market Outlook
Following these recent developments, Citi analyst Filippo Falorni maintained a Hold rating on Kenvue, setting a price target of $17. He expressed caution regarding Kenvue due to the potential legal ramifications arising from the ongoing talc lawsuits.
Buy Recommendations
Currently, Wall Street holds a Moderate Buy consensus rating for Kenvue. There are five Buy ratings and nine Hold ratings among analysts. The average price target for KVUE stock is $20.04, suggesting a 42% upside from its present valuation.
