ISS Backs Kenvue (KVUE) Deal, Investors Debate Tylenol and Litigation Risks

Kenvue Inc. (NYSE:KVUE) is included on our list of the best undervalued wide moat stocks.

Kenvue Inc. (NYSE:KVUE) is looking to potentially reshape the consumer health landscape, as it received institutional support for its proposed merger with Kimberly-Clark. On January 16, 2026, Reuters reported that Institutional Shareholder Services (ISS), a proxy advisory firm, recommended that shareholders approve Kimberly-Clark’s $40 billion bid for Kenvue. The firm believes the merger could deliver positive synergies and advance strategic objectives, despite uncertainties surrounding ongoing talcum litigation and concerns regarding Tylenol’s active ingredient.

Meanwhile, Meridian Hedged Equity Fund discussed Kenvue Inc. (NYSE:KVUE) in its Q3 2025 investor letter, highlighting the market’s overreaction to the Tylenol safety concerns. The firm noted minimal revenue impact from pregnant women, no new scientific evidence, and largely dismissed litigation claims. In fact, the fund believes the company could unlock significant value if it reinvests in underfunded brands, optimizes costs, and improves margins.

Investor sentiment may stabilize ahead of the vote with the ISS endorsement. Kimberly-Clark’s share price is down 17% since the deal announcement, and Kenvue Inc. (NYSE:KVUE) is down 35% since the former consumer healthcare division of Johnson & Johnson was listed as a public company in 2023.

Kenvue Inc. (NYSE:KVUE) focuses on developing and selling consumer healthcare products, including Tylenol and Neutrogena. The company operates across Self Care, Skin Health, and Essential Health segments globally.

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