10 Best Hair Care Stocks To Buy Now

2. Kenvue Inc. (NYSE:KVUE)

Number of Hedge Fund Investors: 58

Kenvue Inc. (NYSE:KVUE), with $15 billion in revenue annually, is the largest pure-play consumer health company in the world. The business, which was originally Johnson & Johnson’s consumer division, split out and went public in May 2023.

Given its capacity to deploy funds and make investments as a stand-alone company, analysts predict that Kenvue would emphasize growing its 15 priority brands, including its haircare names, such as Johnsons, Neutrogena, Aveeno, OGX, and Rogaine, to fuel future growth.

Its portfolio includes many of the best-known brands in the business, such as Aveeno, Johnson’s, Listerine, Neutrogena, and Tylenol. Due to their exceptional brand strength, several of the company’s brands are the market leaders worldwide in their respective niches, even though they compete in a highly fragmented industry with ever-changing consumer preferences.

Oakmark Fund stated the following regarding Kenvue Inc. (NYSE:KVUE) in its first quarter 2024 investor letter:

“Kenvue Inc. (NYSE:KVUE) became the largest standalone consumer health company following its split-off from Johnson & Johnson in May 2023. The company’s highly recognizable brands, such as Neutrogena, Listerine, Tylenol and Band-Aid, have been market share leaders in their respective categories for generations. However, Kenvue’s first year as a public company was clouded by litigation and market share losses in certain categories. As a result, Kenvue now trades for just 16.5x trailing earnings, a substantial discount to the market and other consumer health and packaged goods companies. We see an opportunity for the company to improve efficiency and re-invest the cost savings into increased product development and marketing, which should help improve its growth and brand equity.”

The firm’s Q2 2024 statistics, which revealed $4.0 billion in revenue and 1.5% organic growth, signaled a turnaround and led to an increase in Kenvue’s stock price. Despite macro headwinds, the company’s high-intangible brands and cost-cutting initiatives are expected to generate persistent momentum.

Morningstar analysts project that the company, like a number of its wide-moat competitors, will invest roughly 3% of sales on R&D in order to launch innovative products.

Natixis Global Asset Management’s Harris Associates is the largest shareholder in the company, with 29,273,397 shares worth $532.19 million.