Kenvue Stock Plunges on Report Linking Tylenol to Autism
Shares fell over 9% after a report suggested a potential government study linking the popular painkiller to autism, sparking investor concern.
Shares of Kenvue Inc. (KVUE), the consumer health giant behind Tylenol, tumbled more than 9% on Monday following a report that the U.S. Department of Health and Human Services (HHS) is planning to release a study on the potential risks of prenatal acetaminophen use.
The sell-off was triggered by a suggesting the upcoming government study could find a link between the use of the popular painkiller during pregnancy and autism spectrum disorder. The news sent Kenvue's stock to a one-year low, with shares initially dropping as much as 16% in volatile trading before paring some of the losses.
An HHS spokesperson attempted to calm the market, stating, "Until we release the final report, any claims about its contents are nothing more than speculation." However, the statement did little to quell investor fears over potential litigation and regulatory challenges for one of Kenvue's flagship products. The company, which was spun off from Johnson & Johnson in 2023, now faces a significant headwind that analysts believe could weigh on the stock for the foreseeable future.
Wall Street analysts have been quick to react to the developments. UBS on the stock, noting the situation creates a potential "overhang" that could limit strategic actions for Kenvue’s Self Care division. The investment firm drew parallels to a similar controversy the company faced after its IPO regarding acetaminophen's potential health impacts.
Other analysts have also weighed in amid the uncertainty. BofA Securities reiterated its "Buy" rating, while RBC Capital maintained a "Sector Perform" rating, citing a recent soft quarter. The potential for has put Kenvue squarely in the spotlight as investors await the official release of the HHS study and assess the long-term financial implications for the company.