Kenvue Earnings: Pressured Volumes Give Investors Headaches, but Shares Look Slightly Undervalued

Wide-moat Kenvue reported its first earnings as a standalone public company with solid results. Total sales were up 5.4%, mainly helped by another strong quarter from self-care which was up 12.2% and offset by slight depression in volume in other segments and unfavorable foreign currency. We continue to see Kenvue's robust pricing power and its ability to pass over elevated input costs to customers as value realization—which is defined by the company as impact from price and mix—was up nearly double digits on a consolidated level. We attribute this to Kenvue's strong intangible assets, driven by its portfolio of market-leading brands, including Tylenol, Listerine, and Band-Aid. We maintain our fair value estimate of $27.50 per share.