Kenvue Inc. (KVUE): A Bull Case Theory 

We came across a bullish thesis on Kenvue Inc. on The Value Road’s Substack. In this article, we will summarize the bulls’ thesis on KVUE which was published before KVUE’s acquisition announcement. Kenvue Inc.’s share was trading at $17.35 as of November 28th. KVUE’s trailing and forward P/E were 23.13 and 15.77 respectively according to Yahoo Finance.

Kenvue Inc. operates as a consumer health company in the United States, Europe, the Middle East, Africa, Asia-Pacific, and Latin America. KVUE is currently undertaking a comprehensive review of strategic alternatives, overseen by a Strategic Review Committee of the board, aimed at optimizing its brand portfolio and enhancing operating performance to unlock shareholder value.

The company has emphasized that there is no set timeline for this review, nor are there guarantees regarding specific outcomes. With a market capitalization of approximately $30 billion and an enterprise value of around $38 billion, Kenvue trades at an EV/EBITDA multiple of roughly 11× and offers a dividend yield of about 4%, providing a solid income component for investors.

Potential outcomes from the strategic review could include the sale of underperforming Skin Health & Beauty brands, acquisitions in high-growth OTC health categories, and reallocation of capital to higher-margin segments, all intended to streamline operations and focus on the most profitable areas of the business. Analysts estimate that these initiatives, particularly portfolio optimization and margin improvement, could raise Kenvue’s margins and overall valuation by 15–25%, although larger mergers or acquisitions are considered less likely until leverage is reduced to a more comfortable level.

The combination of a disciplined strategic review, the potential for targeted divestitures, and a focus on higher-margin segments positions Kenvue to enhance profitability and shareholder returns over time. The company’s current valuation and dividend yield, paired with these strategic initiatives, create an attractive investment case, particularly for those looking for a company with both operational upside and a clear path to unlocking value from a more efficient and focused brand portfolio. Overall, Kenvue represents a measured yet compelling opportunity with multiple levers for growth and value creation.

Previously we covered a bullish thesis on e.l.f. Beauty, Inc. (ELF) by Fierce__beast in November 2024, which highlighted the company’s growth from a $1 cosmetics brand to the #2 mass cosmetics brand in the U.S., driven by e-commerce, international expansion, and strategic acquisitions. The company’s stock has depreciated approximately by 37.90% since coverage. The Value Road shares a similar approach but emphasizes Kenvue’s strategic review, divestitures, and margin improvements to unlock value.

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Disclosure: None.