Retail Traders See ‘Huge Buying Opportunity’

U.S. President Donald Trump’s caution against Tylenol has reignited scrutiny of Kenvue, just as the U.S. FDA moves to add pregnancy-related autism warnings to acetaminophen labels and has alerted physicians nationwide. 

Although the agency acknowledged that no causal link has been established, plaintiffs’ lawyers say the new language could revive litigation dismissed by a federal court last December, according to a Bloomberg report. 

The heightened risk comes as Kenvue, under interim CEO Kirk Perry, faces weak sales, activist investor demands, and a portfolio review. Tylenol, its largest brand, contributes a mid- to high-single-digit share of revenue. 

Despite the legal overhang, Kenvue’s stock shrugged off concerns, rising 1.6% in regular trade and another 0.8% after hours on Tuesday. Investors took comfort in the fact that the FDA stopped short of a ban and that no new scientific evidence was presented. 

Citigroup said it sees limited legal risk and expects shares to trade higher, while Evercore ISI cut its price target to $18. Barclays argued that the recent selloff looks overdone, even under highly unlikely worst-case scenarios.

The move may also mark Kenvue’s biggest reputational test since the 1980s Tylenol cyanide poisonings, with concerns that it could create confusion for patients who need to treat fevers during pregnancy.

Plaintiffs’ lawyer Mark Lanier said the FDA move breathes new life into lawsuits, while legal experts noted courts rarely overturn the agency’s risk assessments. Kenvue stated that the claims lack both legal and scientific merit. Johns Hopkins professor Stacey Lee said even without proving causality, the label could be powerful evidence before juries.

The company has been unsettled since its 2023 spin-off from Johnson & Johnson. Former CEO Thibaut Mongon struggled to stabilize operations, prompting pressure from activist hedge funds Starboard Value, TOMS Capital, and Third Point. Kenvue responded by naming Perry interim CEO, adding Starboard’s Jeffrey Smith to its board, and considering the sale of smaller skincare brands, such as Neutrogena.

The business faces a challenging consumer backdrop of inflation, high interest rates, and weaker demand, which has led to two consecutive quarters of declining organic sales and a reduction to its full-year forecast. 

On Stocktwits, retail sentiment for Kenvue was ‘bullish’ amid a 270% surge in 24-hour message volume.

One user pointed out that no direct causal link between pregnancy and autism has been established and described the stock as a “huge buying opportunity,” adding that they bought shares after hours and expect it to soon reach $21.

Another bullish user called Kenvue a “great investment opportunity.”

Kenvue’s stock has declined 17% so far in 2025.

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