Deutsche Bank says the overselling in Kenvue stock could present an attractive entry point for investors. The firm upgraded shares of the Johnson & Johnson spinoff to buy in a Sunday note, albeit with an unchanged $27 per share price target. Deutsche Bank’s forecast implies nearly 27% upside from Friday’s $21.30 close. Kenvue stock has slipped more than 15% since going public in May. The stock’s 22% jump after its initial public offering valued the company at roughly $50 billion . The split from J & J was initially announced in 2021 , with Kenvue maintaining key consumer brands under its umbrella including Neutrogena, Band-Aid and Tylenol. KVUE YTD mountain Kenvue stock has slipped more than 15% since May. Meanwhile, Deutsche Bank analyst Steve Powers thinks the firm’s $27 per share price target is achievable in the short-term, and predicts the forecast upside is likely to yield in the next three to six months. “Ultimately, KVUE is a high-quality company (and now liquid stock, with membership in the S & P 500),” Powers said in the note. “It has a portfolio of leading brands, a clean balance sheet ( < 2x net debt/EBITDA exiting FY23), and ample industry consolidation opportunities (whether organic or inorganic).” Powers also addressed the company’s exposure and potential ramifications from a legal case over acetaminophen use during pregnancy, which has weighed on the stock in recent months . However, Powers opines that Kenvue is amply insulated from litigation. “In a vacuum, we view this as implicitly supportive of the status quo, and thus of KVUE’s position that (i) acetaminophen is generally “safe,” (ii) current acetaminophen warning labels are adequate, and (iii) any linkages between prenatal acetaminophen usage and autism/ADHD are unclear/inconclusive based on current science,” he said. — CNBC’s Michael Bloom contributed to this report.
