Investors may want to scoop up newly public company Kenvue on the cheap, Goldman Sachs said. Analyst Jason English upgraded the stock to buy from neutral. His $29 price target signals shares could rally 22.8% from Wednesday’s close. “We see compelling relative valuation with an approaching catalyst for a re-rating,” English said in a note to clients Wednesday. KVUE .SPX ALL mountain Kenvue vs. the S & P 500 Kenvue, the Johnson & Johnson spin-off sporting brands such as Neutrogena and Tylenol that went public earlier this year, has fallen about 14% from its mid-May peak. In that period, the stock has trailed the S & P 500 by more than 20 percentage points. English attributed the underperformance in part of broader troubles for staples stocks. But he also noted that technical factors connected to the exchange offer for the IPO could play a role, which would now open up a valuation window. The stock now appears cheap on a forward price-to-earnings ratio, though he said there’s no justification for a discount given Kenvue has top brands that should see growth and returns in line with peers. According to FactSet, Kenvue trades at a forward multiple of 18.31. To be sure, English noted there’s other factors that could impact share performance, including losses in market share, or if the self-care business sees a larger post-Covid reset than anticipated. Currency and lawsuits could also weigh on the stock, he said. Shares climbed 1.6% before the bell Thursday. — CNBC’s Michael Bloom contributed to this report
