Jefferies announced a downgrade of Kenvue Inc (NYSE:KVUE), moving its rating from Buy to Hold and lowering the price target to $18.00 from $23.00. The new target sits close to Kenvue’s then-current trading level of $17.20, a gap Jefferies describes as offering minimal upside to investors.
The downgrade followed shareholder approval of the merger between Kenvue and Kimberly-Clark, a development that removes a principal obstacle to the transaction and leaves the deal on track to close in the fourth quarter. Jefferies noted that Kenvue shares are trading in close proximity to the implied offer value, which the firm places at roughly $18 per share.
In tandem with the rating change, Jefferies eliminated Kenvue from its Franchise Pick list. The firm highlighted ongoing risks it sees for the company, explicitly citing litigation uncertainty and slower trends at Kenvue as factors that temper the stock’s near-term appeal. Despite flagging these risks, Jefferies observed that Kimberly-Clark’s management appears comfortable accepting those uncertainties while focusing on the longer-term turnaround opportunity for several underperforming, well-known brands.
Market-data referenced in the note also indicated mixed signals on valuation. InvestingPro data, as cited, suggests Kenvue may be slightly undervalued when assessed against its Fair Value metric, even as Jefferies’ more conservative target and the transaction-implied value constrict the potential for immediate gains.
Operational and shareholder developments for Kenvue continued to unfold on other fronts. The company declared a quarterly dividend of $0.2075 per share, payable on February 25, 2026, to holders of record on February 11, 2026. At the same time, Kimberly-Clark agreed to acquire Kenvue in a cash-and-stock transaction valued at approximately $48.7 billion. Under the terms of that agreement, Kenvue shareholders will receive $3.50 in cash and 0.14625 Kimberly-Clark shares for each Kenvue share held—equating to $21.01 per share based on Kimberly-Clark’s closing price on October 31.
The acquisition has had notable effects among certain investors, with multiple activist hedge funds reportedly benefiting from the deal after facing potential losses earlier when Kenvue’s stock declined. Separately, RBC Capital maintained a Sector Perform rating on Kenvue and kept a $21.00 price target. RBC’s commentary anticipated a difficult upcoming quarter for Kenvue, attributing expected pressure to broader market headwinds and specific softness in the Tylenol and Skin Health & Beauty segments.
Taken together, the mix of near-term valuation constraints, the cleared path for a definitive takeover and operational concerns have prompted differentiated views among analysts: Jefferies has moved to a more defensive stance with a Hold rating and a lower target, while RBC remains more neutral with its Sector Perform rating and a higher target. Shareholders will watch the deal-closing timeline, upcoming quarterly performance and any litigation developments as near-term catalysts for the stock.
Takeaway: Jefferies’ downgrade reflects a view that the combination of an imminent transaction-implied price and lingering business and legal uncertainties limit upside for Kenvue shares in the near term, even as other analysts leave room for varied outcomes.