Kenvue Stock Recoups Losses After Trump Links Tylenol to Autism

• Shares of Kenvue, which makes Tylenol, have recovered almost 60% of their losses since Friday night.

• Investors may have expected President Donald Trump to announce more regulations on Tylenol, which he claimed pregnant women shouldn’t take because of a link to autism.
  

Kenvue stock is rebounding. It may be a largely a case of things-could’ve-been- worse.

Kenvue (KVUE) shares were recently up some 3%, recovering a bit after a more than 7% selloff Monday in anticipation of President Donald Trump’s comments regarding Tylenol, one of its core products, and autism. Trump on Monday evening said taking Tylenol while pregnant is “not good,” but his administration in a fact sheet said that “evidence does not definitively establish causality” between acetaminophen, the active ingredient in Tylenol, and autism.

By midday Tuesday, Kenvue shares had recovered almost 60% of their losses since Friday’s close. Some investors seem to have anticipated more regulation of Tylenol in the administration’s plan to tackle what it calls an “autism epidemic,” Citi analysts said late yesterday.

One traders’ adage is to “buy the rumor, sell the news“—in short, to bid a stock upwards ahead of an event, then sell out when the event lands. The latest action in shares of Tylenol maker Kenvue looks like a version of that, though investors sold first, then bought today. Event-driven volatility can help some investors profit, but predicting stocks’ short-term moves is a challenge to say the least.

Trump-administration policy reflected “a better-than-feared outcome, as some investors had feared an outright ban of Tylenol (or more severe sales limitations) and/or the release of new scientific data establishing [a] direct causal link between acetaminophen and autism,” the analysts said.

Tylenol represents about 10% of Kenvue’s sales and generates 12% to 15% of its operating profit, Citi estimates. Kenvue’s self-care segment, which includes Tylenol, Motrin, Benadryl, and other medications, generated about 42% of the company’s sales last fiscal year, according to its annual report.

The administration announced plans to update warning labels on Tylenol and run a public service campaign stating that pregnant women should take “the lowest effective dose for the shortest duration” if feverish.

The Department of Health and Human Services on Tuesday confirmed that it would launch a “nationwide campaign.” It didn’t respond to questions about how it wants to change warning labels, the details of its PSA push, or other next steps in time for publication.

“HHS wants to encourage clinicians to exercise their best judgment in use of acetaminophen for fevers and pain in pregnancy,” the government said in a statement.

Recent studies found “no significant associations between use of acetaminophen during pregnancy and children’s risk of autism, ADHD, or intellectual disability,” the American College of Obstetricians and Gynecologists said, saying that Tylenol is safe to to take while pregnant. There aren’t safe alternatives for pregnant women who have a fever, which puts mothers and fetuses at risk, the group said.

Kenvue in a statement said the company is “deeply concerned about the health risks and confusion this poses for expecting mothers.”

“We will continue to reinforce that expecting mothers speak to their health professionals before taking any over-the-counter medication and will explore all options to protect the health interests of American women and children,” the statement said.

“We see limited judicial risk,” Citi analysts said. “However, we believe there could be risk to Tylenol consumption given the HHS recommendation may push consumers to reduce consumption of the brand.” A 10% drop in Tylenol sales would reduce Kenvue’s profit by $40 million to $50 million, Citi estimated. 

United Kingdom Health Secretary Wes Streeting urged people not to pay “any attention whatsoever” to Trump’s claims, according to the BBC.

The administration’s announcement has not had as dramatic of an impact on shares of GSK PLC (GSK), a multinational pharmaceutical company. The White House said it will take steps to allow state Medicaid programs to cover one of GSK’s drugs, leucovorin, for those with autism. Shares of GSK were recently off by about 1%.

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