Replies to post #7 on Kenvue Inc (KVUE)

[DewDiligence]

KVUE’s sets annualized dividend of $0.80/sh—(from 7/20/23):

https://finance.yahoo.com/news/kenvue-initiates-quarterly-cash-dividend-102300286.html

At the current share price ($23.66), the annualized payout is a yield of 3.4%.

[DewDiligence]

The P/E, based on the company’s 2023 non-GAAP EPS guidance of $1.26-1.31, is 17.5-18x — high, but not exorbitant, for a reliable company in a non-cyclical sector of the economy.

I’m impressed with the backgrounds of the CEO and CFO, which include extensive international experience. (~50% of KVUE’s sales are ex-US.)

I listened to KVUE’s 2Q23 CC (its first CC ever) and thought the amount of disclosure was helpful. (Nobody on the CC asked about the ex-US talc liabilities; the sell-side analysts presumably didn’t want to get off on the wrong foot, LOL.)

I’m considering taking a position after a bit more DD.

[DewDiligence]

KVUE reports 3Q23 results—lowers 2023 guidance slightly:

https://investors.kenvue.com/financial-news/news-details/2023/Kenvue-Reports-Healthy-Third-Quarter-2023-Results/default.aspx

3Q23 sales of $3.9B were +3.3% YoY. Organic sales YoY growth (which excludes the effects of FX, acquisitions, and divestitures) was +3.6%, consisting of +7.1% from price/mix and -3.5% from volume, due mainly to lower sales in China.

3Q23 non-GAAP net income was $438M, -25% YoY due in large part to a higher effective tax rate. 3Q23 GAAP and non-GAAP EPS were $0.23 and $0.31, respectively.

Guidance for the full 2023 calendar year is: YoY sales growth of 4.0-4.5% (from the prior range of 4.5-5.5%); and YoY organic sales growth of 5.5-6.0% (from the prior range of 5.5-6.5%); and GAAP EPS of $1.26-1.28 (from the prior range of $1.26-1.31). The reductions are due to a late start to the cold/flu season as well as continued weakness in China.

CC slides:
https://s202.q4cdn.com/991673667/files/doc_financials/2023/q3/2023-Q3-QuarterlyEarningsReport-FINAL_Website_10-26-23.pdf