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According to the American College of Allergy, Asthma & Immunology , spring allergy season in the U.S. typically runs from Feb. through early June, with peak tree pollen levels between March and mid-May. While trees — oak, birch, maple — dominate early spring, grass pollen often overlaps in late spring from May to June, leading to higher, more intense allergy loads for sufferers. Two days ago, Zyrtec joined the PGA TOUR as its first official “allergy relief sponsor.” “Seasonal allergies affect millions, and golf is where those symptoms can show up the hardest — hours of exposure to grass and pollen can challenge even the best players,” said Jenn Lovell, commercial head, U.S. Allergy, Kenvue . “As golf season collides with allergy season, ZYRTEC is proud to partner with the PGA TOUR to offer relief to the 85% of players impacted by allergies—while also helping a growing community of golf fans fully enjoy the sport they love.” What Lovell didn’t say is that, with short periods of modest relief, investors have largely been allergic to Kenvue stock since the company spun off from Johnson & Johnson almost three years ago. By last October, Kenvue shares had fallen by almost half from the post-spinoff high, far enough to attract an acquirer: Irving, Texas-based toilet paper and diaper company Kimberly-Clark , which offered to buy the company for 0.1462 shares of its own stock plus $3.50 in cash per share. Based on Wednesday’s closing price for Kimberly-Clark, that would value Kenvue at $18.82 per share. Kenvue closed at $18.19 on Wednesday, slightly below the theoretical transaction value, which is expected to close by the end of the year. Under “normal” circumstances, we favor asset-light, high-growth companies with novel products, wide margins, and moats. But what are normal circumstances? Software companies have grossly underperformed hardware since mid-2025 amid concerns that AI will transform the world. It very well might. The Middle East, a global geopolitical issue since the collapse of the Ottoman Empire, and even more of a powder keg since the creation of Israel in 1948, is conflagrating once again. As we seek investments less vulnerable in tumultuous times, growth stocks may look slightly less attractive. Growth stocks are often more volatile than more staid old-economy businesses. As a group, growth stocks generally pay little to no dividends, trade at higher multiples, have higher betas and their underlying businesses are more subject to change. In such circumstances, companies that sell diapers, toilet paper and allergy medications might be what the doctor ordered. It seems unlikely that diaper and toilet paper demand will drop if geopolitical circumstances worsen — one could argue that might increase short-term demand for those products. Collectively, Kenvue and Kimberly-Clark are expected to generate ~32.5 billion in revenues this year and ~4.6 billion in adjusted net income. That’s ~15x FY earnings, below the historical average multiple for both companies. Admittedly, Kenvue has only been independent since Aug. of 2023, so the historical record is somewhat limited. To further limit risk, buying calls or call spreads provides upside exposure with defined risk. For example one could buy the Kenvue Jan. 2027 18 strike calls, which are slightly in the money, for ~$1.65/contract, or possibly look to a spread. The example I provide below, which uses mid-market prices by the way, so a combination of “limits” and “working the order” may be required, would be perhaps $0.60 less. DISCLOSURES: None. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, or its parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
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