Analysts cite lack of new scientific evidence as shares recover from record low
Kenvue (KVUE) shares rose 6% on Tuesday, recovering from an all-time low in the previous session after President Donald Trump linked the company’s flagship product, Tylenol, to autism without presenting new scientific evidence. The rebound reflected investor relief that health regulators and experts quickly reaffirmed the safety of acetaminophen, the active ingredient in Tylenol.
On Monday, Trump elevated concerns by suggesting both childhood vaccines and maternal use of Tylenol during pregnancy could be tied to autism. The comments triggered a sharp selloff in Kenvue’s stock, as investors feared regulatory or legal consequences. However, analysts noted that no new data was introduced to support these claims.
“Investors were holding their breath worried that yesterday’s announcement would be a bombshell. It turned out it wasn’t, as no new scientific evidence was presented,” said James Harlow, vice president at Novare Capital Management.
Health agencies in the European Union and the United Kingdom reaffirmed the safety of paracetamol during pregnancy, while the World Health Organization said evidence of any link remains inconsistent. Kenvue itself reiterated that acetaminophen has no proven connection to autism, warning that spreading misinformation could pose risks to maternal health.
Tylenol is a crucial product for Kenvue, generating about $1 billion annually in sales, according to Morningstar estimates. While Citi analysts acknowledged the potential for negative headlines to impact consumer sentiment, they see limited judicial risk.
The Food and Drug Administration announced plans to update Tylenol and generic labels to reference existing research on possible neurological risks, but emphasized that no causal relationship has been established.
“This issue only involves pregnant mothers, which is a smaller subset of consumers—so the actual impact on Kenvue’s financials was always likely to be modest,” Harlow added.
Kenvue, spun off from Johnson & Johnson in 2023, appears to have weathered the immediate market fallout, though scrutiny over maternal drug safety may continue.
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