“You can’t be a real country unless you have a beer – it helps if you have some kind of football team, or some nuclear weapons, but in the very least you need a beer.” Frank Zappa
kenvue reopens the IPO window (KVUE)
Kenvue is scheduled to go public at the end of the week. The proposed $3.5B IPO would value the consumer health spinoff at $40B. Kenvue will be the world’s largest pure-play consumer health company in the $369B industry. The company competes in self-care, skin care & beauty, and essential personal care products. Kenvue owns well-known brands including Tylenol, Band-Aid, Listerine, and Neutrogena among many others. Ten of its brands each had $400M or more in sales. Seven of its brands are market share leaders in their respective categories globally.
Kenvue is being priced to succeed because Johnson & Johnson is looking beyond the IPO. The IPO represents less than 10% of the total shares. Similar to other healthcare companies, Johnson & Johnson is looking to position its consumer health division in consumer staples where slower and steadier growth combined with higher dividends are valued at a premium to other sectors.
There are tens of thousands of claimants over the company’s past production of talc after a large jury verdict. We will help put the risk in context. The company’s recent growth trails the competition. As slow-growing units within large companies, consumer healthcare business segments were leaned on for their cash flow. The sector did not have innovation, investment, or growth as a priority. Attractive cash flows will be redirected within the new sector.
The IPO will likely bring more attention to the consumer health segment and Haleon, Perrigo, Prestige Consumer Healthcare, Reckitt Benckiser, and Church & Dwight.
We are hosting a pre-IPO review today at 2 PM ET.
| Webcast & Slides: CLICK HERE (Refresh shortly before the call). |
PRICE SENSITIVITY RISES (COST)
Morning Consult’s measure of price sensitivity has increased for all income groups over the past year. Low-income earners have reported higher levels of price sensitivity, but the gap to the other income groups has narrowed. Higher earners have seen the largest increase in price sensitivity in March. The rate of inflation has decelerated as we lap higher rates from last year, but for consumers inflation’s impact is compounding.
