One of the season’s most hotly anticipated initial public offerings (IPOs) is about to hit the market. Kenvue is a planned spinoff from Johnson & Johnson (NYSE:JNJ), and the company is set to begin trading soon. The pharmaceutical giant is still recovering from a difficult two quarters, and some experts have soured on it. Now with the Kenvue IPO quickly approaching, a turnaround may be imminent.
The new company is expected to begin trading on May 4 on the New York Stock Exchange under the trading symbol KVUE. With its big day less than a week away, investors are watching keenly as KVUE stock gears up to start trading. This could be the most important IPO of the year so far.
What the Expect From the Kenvue IPO
Kenvue initially filed to go public in January 2023. Market research firm Finder speculated that it would likely launch by November 2023. However, with the Kenvue IPO scheduled for early May, the company is clearly ahead of schedule. The company expects to raise $3.25 billion in its trading debut, with shares expected to range between $20 and 23 apiece. Experts have made it clear that they have high hopes for KVUE stock as it begins trading. As Barron’s reports:
“Kenvue’s business might not be as exciting as that of a Silicon Valley unicorn, but it is consistent. Annual sales growth over the next few years is projected to be modest at about 4%, with skin, baby, and oral care leading the way. Kenvue’s organic sales growth—excluding currency—was about 4% in both 2021 and 2022. The company had adjusted earnings of $630 million, or 33 cents a share, during the first quarter, up 3% year over year.”
That sounds encouraging enough to lead to a successful IPO. Analyst Rohit Kulkarni of Roth MKM has also touted the new stock’s potential, noting that Kenvue’s sector benefits from inflation-driven tailwinds. And as Barron’s also notes, Kenvue will begin trading with a solid balance sheet and a net debt of less than $8 billion, “about two times annual pretax cash flow—enough for a single-A credit rating.” Following the Kenvue IPO, about 91% of the new company will be controlled by Johnson & Johnson. The larger firm plans to distribute the remaining 1.7 billion shares later, likely in the second half of 2023.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
