This week, Kenvue, the patron well being spin-off from Johnson & Johnson, discovered itself on the epicenter of a market tempest this week. It started when The Wall Avenue Journal reported Robert F. Kennedy Jr., a longtime promoter of scientifically baseless causes for autism, deliberate to hyperlink Tylenol use throughout being pregnant to the situation. A inventory rout ensued, since Kennedy is secretary of the U.S. Division of Well being & Human Providers and leads the “Make America Wholesome Once more” motion, or MAHA. An intraday hunch neared 15% at one level after the Journal‘s report earlier than retreating, however roughly 9% has nonetheless been wiped off Kenvue’s market cap.
A refrain of Wall Avenue analysts beg to vary, reaffirming Kenvue’s elementary resilience and seeing this as a chance to purchase the dip. In notes distributed to shoppers Monday morning, companies comparable to BofA Securities and Canaccord Genuity inspired traders to view the sell-off as a shopping for alternative moderately than affirmation of a deep and lasting risk to Kenvue’s enterprise.
No proof, even a blended MAHA response
Canaccord analysts wrote the financial institution believes the authorized danger is minimal given {that a} mass tort lawsuit on related claims “was primarily shut down” in December 2023. The financial institution additionally famous a press release from HHS that any claims about Kennedy’s report had been hypothesis. Calling the market sell-off a “main overreaction,” it added that it sees “no respected examine [that] has linked acetaminophen use to elevated danger of [autism spectrum disorder].” The headline danger, if any, is shedding a small section of customers moderately than a multibillion-dollar verdict.
Canaccord additionally monitored public sentiment by studying feedback throughout a number of social media codecs, together with these extra more likely to assist Kennedy’s MAHA motion. Mainstream channels finds no acceptance of those claims, whereas even “extra fringe” sources produce “blended sentiment” with indicating there’s nonetheless no proof, and others vocal about different seeming conspiracy theories, comparable to that vaccines trigger autism—additionally unproven, the financial institution notes.
Analysts at BNP Paribas stated Friday proving a hyperlink to autism stays unlikely given prior rulings that Tylenol is protected, together with the FDA saying it hasn’t discovered clear proof tying acetaminophen to developmental dangers, and the American School of Obstetricians and Gynecologists making an identical suggestion. The FDA does advise pregnant ladies to verify with their docs about utilizing it, although.
No smoking gun
Regardless of ongoing lawsuits, federal judges have to date discovered the scientific proof linking acetaminophen use in being pregnant to autism or ADHD to be inconclusive, resulting in the dismissal of a number of high-profile circumstances.
Kenvue itself has forcefully denied any wrongdoing and highlighted the regulatory consensus. In a press release to the BBC, the corporate stated, “We’ve got repeatedly evaluated the science and proceed to imagine there isn’t a causal hyperlink between acetaminophen use throughout being pregnant and autism.” Nonetheless, the uncertainty isn’t misplaced on Wall Avenue. A number of notes flagged the potential for elevated authorized bills and PR prices if the controversy drags out.
For these watching carefully, the response throughout Wall Avenue presents an essential lesson in how medical controversies play out in public markets. Whereas headline danger could rattle shares, nuanced evaluation from analysts can shortly restore perspective and, in some circumstances, spark restoration. Because it stands, Kenvue’s Tylenol saga seems to be extra noise than sign—a minimum of for now, in response to these paid to know.
For this story, Fortune used generative AI to assist with an preliminary draft. An editor verified the accuracy of the data earlier than publishing.
