Kenvue, the consumer health division of Johnson & Johnson (NYSE:JNJ), has priced its initial public offering (IPO) at $22 per share, giving the new business a $41 billion valuation. It is worth highlighting that the IPO, which is anticipated to raise about $3.8 billion, will likely be the largest listing in the United States over the past 18 months.
Additionally, the company increased the number of shares offered from 151 million to approximately 173 million. Additionally, to cover overallotments, underwriters are given a 30-day option to purchase up to 26 million extra shares. Goldman Sachs (GS), JPMorgan Chase (JPM), and Bank of America (BAC) are among the lead underwriters for the offering.
Upon the closing of the IPO, expected on May 8, J&J will continue to own over 91% of Kenvue’s shares. Importantly, the shares of Kenvue are expected to begin trading on the NYSE today under the symbol “KVUE.”
A few well-known brands owned by Kenvue include Tylenol, Neutrogena, Band-Aids, and Johnson’s Baby Shampoo. In 2022, the division reported a net income of $1.5 billion on $15 billion in revenue.
What is the Future of JNJ Stock?
Kenvue’s spin-off is anticipated to be a turning point for JNJ, which has recently been dealing with legal issues. Numerous lawsuits alleging a connection between Johnson & Johnson’s talc products have been brought against the company. However, the introduction of new products and cost-cutting initiatives might support its revenue and margin in the second half of 2023.
Turning to Wall Street, JNJ stock is a Moderate Buy based on five Buys and 12 Hold ratings. The average Johnson & Johnson stock price target is $179.95, implying 10.5% upside potential.