johnsone/initiation · Datasets at Hugging Face

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Source: Company reports, Bloomberg Finance L.P., J.P. Morgan estimates.; *CL North America ex-Pet but U.S. includes Pet
Beyond HLN, CL, and PG, we also compare KVUE to additional companies with
exposure to the Consumer Health space and also a broader basket of HPC and Beauty
companies given KVUE􀋖s presence in the face care, body care, and sun care categories
as well as baby care. KVUE sales growth and margin outlook are largely comparable
across the Consumer Health and HPC & Beauty peers on average (e.g., HPC & Beauty
weighted average 2023-2024E sales CAGR +5.1% with 2023E EBITDA margins
~23.2% and Consumer Health weighted-average 2023-2024E sales CAGR +3.1% with
2023E EBITDA margins ~25.4% vs. KVUE 2023-2024E sales CAGR +4.4% with
2023E EBITDA margins 24.2%).
This document is being provided for the exclusive use of DAVID WANG at MARLOWE PARTNERS LP.
36
Andrea Teixeira, CFA AC
(1-212) 622-6735
andrea.f.teixeira@jpmorgan.com
North America Equity Research
29 May 2023 J P M O R G A N
Table 3: Comparable Analysis for KVUE
JPM JPM Price (LC) Dividend Market Cap
Enterprise
Value
Company Ticker Analyst Rating 5/26/2023 Yield (USD mn) (USD mn) 2022 2023E 2024E 1-yr 2-yr 5-yr
Consumer Health
Beiersdorf BEI GR Pannuti N 123.90 112 0.6% 33,471 25,316 17.1x 14.9x 13.8x 14.8x 14.7x 15.1x
Bayer BAYN GR Vosser N 54.32 60 4.4% 57,208 95,239 6.6x 7.2x 6.7x 6.7x 6.9x 7.6x
Haleon HLN LN Pannuti UW 3.30 3 0.7% 37,617 49,816 14.8x 14.0x 13.3x 12.9x 12.9x 12.9x
Reckitt Benckiser Group RKT LN Pannuti OW 64.16 75 2.9% 56,731 66,275 14.0x 13.4x 12.7x 13.2x 13.9x 14.6x
Sanofi SAN FP Vosser OW 99.40 105 3.6% 134,490 141,743 9.0x 9.0x 8.5x 8.6x 9.1x 9.8x
Unilever ULVR LN Pannuti UW 41.69 39 3.6% 129,635 159,456 13.0x 12.8x 12.0x 12.5x 12.5x 13.3x
AVERAGE 12.4x 11.9x 11.2x 11.4x 11.7x 12.2x
WTD. AVERAGE 11.6x 11.3x 10.6x 10.9x 11.1x 11.8x
MEDIAN 13.5x 13.1x 12.3x 12.7x 12.7x 13.1x
HPC & Beauty
Colgate-Palmolive CL Teixeira OW 76.21 87 2.5% 63,221 71,538 16.9x 15.8x 14.7x 15.8x 15.8x 15.5x
Procter & Gamble PG Teixeira OW 145.40 168 2.6% 342,703 389,376 19.1x 17.8x 16.7x 16.9x 17.2x 16.4x
Church & Dwight CHD Teixeira UW 93.97 86 1.2% 22,953 25,616 20.8x 19.4x 18.3x 17.3x 18.1x 18.2x
Kimberly-Clark KMB Teixeira UW 136.30 139 3.5% 45,985 54,237 16.6x 14.4x 13.4x 14.0x 13.8x 12.8x
Clorox CLX Teixeira UW 159.09 158 3.0% 19,667 22,617 24.9x 32.2x 17.2x 18.5x 18.1x 17.4x
Newell Brands NWL Teixeira OW 8.73 14 3.2% 3,615 9,596 7.7x 9.0x 7.9x 9.0x 9.4x 10.3x
Estee Lauder EL Teixeira OW 194.44 224 1.4% 69,495 74,877 23.1x 29.9x 19.7x 21.3x 23.0x 21.5x
e.l.f. ELF Teixeira OW 101.28 102 N/A 5,456 5,596 51.6x 39.5x 34.6x 26.1x 23.2x 19.6x
L'Oreal OR FP Pannuti N 411.00 400 1.5% 236,141 239,811 24.9x 22.8x 21.0x 20.4x 22.6x 21.2x
Olaplex OLPX Teixeira UW 3.29 5 N/A 2,153 2,546 5.9x 9.4x 8.4x 12.4x 18.2x 18.2x
Reynolds Consumer Products REYN Teixeira OW 27.11 31 3.4% 5,693 7,778 14.2x 12.6x 11.6x 12.4x 12.4x 12.2x
Coty COTY Teixeira N 11.03 12 N/A 9,406 14,318 15.2x 14.1x 13.0x 12.4x 13.2x 12.6x
AVERAGE 20.1x 19.7x 16.4x 16.4x 17.1x 16.3x
WTD. AVERAGE 21.0x 20.3x 17.9x 18.0x 18.9x 17.9x
MEDIAN 18.0x 16.8x 15.7x 16.4x 17.6x 16.9x
Kevnue KVUE Teixeira OW 26.30 29.00 3.0% 50,362 58,714 16.3x 15.5x 14.7x -- -- --
JPM JPM Price (LC)
Company Ticker Analyst Rating 5/26/2023 2022 2023E 2024E 1-yr 2-yr 5-yr 2022 2023E 2024E
Consumer Health
Beiersdorf BEI GR Pannuti N 123.90 112 33.9x 31.6x 28.7x 28.6x 29.0x 28.8x 0.9% 2.6% 2.7%
Bayer BAYN GR Vosser N 54.32 60 6.8x 7.7x 7.1x 7.1x 7.4x 8.4x 5.8% 7.1% 11.1%
Haleon HLN LN Pannuti UW 3.30 3 17.9x 18.3x 16.9x 16.0x 16.0x 16.0x 5.3% 5.0% 5.7%
Reckitt Benckiser Group RKT LN Pannuti OW 64.16 75 18.8x 18.8x 17.4x 17.7x 18.6x 19.2x 4.4% 5.4% 6.1%
Sanofi SAN FP Vosser OW 99.40 105 12.0x 12.1x 11.2x 11.0x 11.8x 12.6x 6.6% 6.6% 7.6%
Unilever ULVR LN Pannuti UW 41.69 39 16.2x 16.4x 15.2x 17.7x 17.7x 18.7x 5.3% 6.3% 6.7%
AVERAGE 17.6x 17.5x 16.1x 16.4x 16.8x 17.3x 4.7% 5.5% 6.6%
WTD. AVERAGE 15.6x 15.6x 14.4x 15.0x 15.4x 16.2x 5.3% 6.0% 7.1%
HPC & Beauty
Colgate-Palmolive CL Teixeira OW 76.21 87 25.7x 24.3x 22.2x 24.0x 23.8x 23.5x 2.9% 4.0% 4.5%
Procter & Gamble PG Teixeira OW 145.40 168 25.5x 23.9x 21.9x 23.5x 23.9x 23.0x 3.4% 4.5% 4.7%
Church & Dwight CHD Teixeira UW 93.97 86 31.6x 30.2x 27.9x 26.7x 27.7x 27.4x 3.1% 3.0% 3.7%
Kimberly-Clark KMB Teixeira UW 136.30 139 24.2x 21.8x 19.6x 20.9x 20.3x 18.9x 4.0% 4.5% 4.9%
Clorox CLX Teixeira UW 159.09 158 38.3x 30.2x 26.3x 30.4x 28.7x 26.3x 3.7% 3.9% 4.4%
Newell Brands NWL Teixeira OW 8.73 14 5.6x 9.0x 6.8x 10.0x 11.3x 11.4x -16.2% 12.3% 15.9%
Estee Lauder EL Teixeira OW 194.44 224 37.2x 56.6x 32.9x 35.0x 37.5x 35.2x 1.4% 1.7% 3.5%
e.l.f. ELF Teixeira OW 101.28 102 74.5x 53.4x 51.4x 44.2x 40.4x 36.0x 1.4% 1.8% 2.3%
L'Oreal OR FP Pannuti N 411.00 400 36.5x 34.2x 31.3x 31.2x 35.5x 33.6x 2.2% 3.1% 3.3%
Olaplex OLPX Teixeira UW 3.29 5 7.3x 12.9x 10.9x 17.2x 26.1x 26.1x 11.8% 11.6% 10.4%
Reynolds Consumer Products REYN Teixeira OW 27.11 31 21.2x 20.2x 17.6x 18.7x 17.6x 16.9x 1.6% 6.8% 5.6%
Coty COTY Teixeira N 11.03 12 31.5x 20.1x 22.6x 23.2x 28.4x 24.2x 4.8% 3.6% 5.7%
AVERAGE 29.9x 28.1x 24.3x 25.4x 26.8x 25.2x 2.0% 5.1% 5.7%
WTD. AVERAGE 30.3x 29.9x 25.8x 26.8x 28.4x 27.1x 2.8% 3.8% 4.2%
MEDIAN 28.6x 24.1x 22.4x 23.7x 26.9x 25.2x 3.0% 3.9% 4.6%
Kevnue KVUE Teixeira OW 26.30 29.00 22.3x 23.8x 23.1x -- -- -- 4.0% 4.8% 4.9%
JPM Price
Target
EV/EBITDA
JPM Price
Target
P/E Hist. FwdP /E Avg. FCF Yield
Hist. Fwd EV/EBITDA Avg.
Source: Company reports, Bloomberg Finance L.P., and J.P. Morgan estimates.
This document is being provided for the exclusive use of DAVID WANG at MARLOWE PARTNERS LP.
37
Andrea Teixeira, CFA AC
(1-212) 622-6735
andrea.f.teixeira@jpmorgan.com
North America Equity Research
29 May 2023 J P M O R G A N
Price Target Derivation
We see investors gravitating toward EV/EBITDA to inform valuation for KVUE given
that the company􀋖s treatment of amortization of definite life intangible assets will make
P/E less comparable to peers based on what the company will report as its adjusted
earnings, although we will also present an EPS including amortization of definite life
intangibles to make the comparison more apples to apples. We also added a discounted
cash flow valuation to where the stock could trade over the medium to longer term as
the company continues to execute against its growth priorities and improves margins.

Source: Company reports, Bloomberg Finance L.P., J.P. Morgan estimates.; *CL North America ex-Pet but U.S. includes Pet

Beyond HLN, CL, and PG, we also compare KVUE to additional companies with

exposure to the Consumer Health space and also a broader basket of HPC and Beauty

companies given KVUE􀋖s presence in the face care, body care, and sun care categories

as well as baby care. KVUE sales growth and margin outlook are largely comparable

across the Consumer Health and HPC & Beauty peers on average (e.g., HPC & Beauty

weighted average 2023-2024E sales CAGR +5.1% with 2023E EBITDA margins

~23.2% and Consumer Health weighted-average 2023-2024E sales CAGR +3.1% with

2023E EBITDA margins ~25.4% vs. KVUE 2023-2024E sales CAGR +4.4% with

2023E EBITDA margins 24.2%).

This document is being provided for the exclusive use of DAVID WANG at MARLOWE PARTNERS LP.

36

Andrea Teixeira, CFA AC

(1-212) 622-6735

andrea.f.teixeira@jpmorgan.com

North America Equity Research

29 May 2023 J P M O R G A N

Table 3: Comparable Analysis for KVUE

JPM JPM Price (LC) Dividend Market Cap

Enterprise

Value

Company Ticker Analyst Rating 5/26/2023 Yield (USD mn) (USD mn) 2022 2023E 2024E 1-yr 2-yr 5-yr

Consumer Health

Beiersdorf BEI GR Pannuti N 123.90 112 0.6% 33,471 25,316 17.1x 14.9x 13.8x 14.8x 14.7x 15.1x

Bayer BAYN GR Vosser N 54.32 60 4.4% 57,208 95,239 6.6x 7.2x 6.7x 6.7x 6.9x 7.6x

Haleon HLN LN Pannuti UW 3.30 3 0.7% 37,617 49,816 14.8x 14.0x 13.3x 12.9x 12.9x 12.9x

Reckitt Benckiser Group RKT LN Pannuti OW 64.16 75 2.9% 56,731 66,275 14.0x 13.4x 12.7x 13.2x 13.9x 14.6x

Sanofi SAN FP Vosser OW 99.40 105 3.6% 134,490 141,743 9.0x 9.0x 8.5x 8.6x 9.1x 9.8x

Unilever ULVR LN Pannuti UW 41.69 39 3.6% 129,635 159,456 13.0x 12.8x 12.0x 12.5x 12.5x 13.3x

AVERAGE 12.4x 11.9x 11.2x 11.4x 11.7x 12.2x

WTD. AVERAGE 11.6x 11.3x 10.6x 10.9x 11.1x 11.8x

MEDIAN 13.5x 13.1x 12.3x 12.7x 12.7x 13.1x

HPC & Beauty

Colgate-Palmolive CL Teixeira OW 76.21 87 2.5% 63,221 71,538 16.9x 15.8x 14.7x 15.8x 15.8x 15.5x

Procter & Gamble PG Teixeira OW 145.40 168 2.6% 342,703 389,376 19.1x 17.8x 16.7x 16.9x 17.2x 16.4x

Church & Dwight CHD Teixeira UW 93.97 86 1.2% 22,953 25,616 20.8x 19.4x 18.3x 17.3x 18.1x 18.2x

Kimberly-Clark KMB Teixeira UW 136.30 139 3.5% 45,985 54,237 16.6x 14.4x 13.4x 14.0x 13.8x 12.8x

Clorox CLX Teixeira UW 159.09 158 3.0% 19,667 22,617 24.9x 32.2x 17.2x 18.5x 18.1x 17.4x

Newell Brands NWL Teixeira OW 8.73 14 3.2% 3,615 9,596 7.7x 9.0x 7.9x 9.0x 9.4x 10.3x

Estee Lauder EL Teixeira OW 194.44 224 1.4% 69,495 74,877 23.1x 29.9x 19.7x 21.3x 23.0x 21.5x

e.l.f. ELF Teixeira OW 101.28 102 N/A 5,456 5,596 51.6x 39.5x 34.6x 26.1x 23.2x 19.6x

L'Oreal OR FP Pannuti N 411.00 400 1.5% 236,141 239,811 24.9x 22.8x 21.0x 20.4x 22.6x 21.2x

Olaplex OLPX Teixeira UW 3.29 5 N/A 2,153 2,546 5.9x 9.4x 8.4x 12.4x 18.2x 18.2x

Reynolds Consumer Products REYN Teixeira OW 27.11 31 3.4% 5,693 7,778 14.2x 12.6x 11.6x 12.4x 12.4x 12.2x

Coty COTY Teixeira N 11.03 12 N/A 9,406 14,318 15.2x 14.1x 13.0x 12.4x 13.2x 12.6x

AVERAGE 20.1x 19.7x 16.4x 16.4x 17.1x 16.3x

WTD. AVERAGE 21.0x 20.3x 17.9x 18.0x 18.9x 17.9x

MEDIAN 18.0x 16.8x 15.7x 16.4x 17.6x 16.9x

Kevnue KVUE Teixeira OW 26.30 29.00 3.0% 50,362 58,714 16.3x 15.5x 14.7x -- -- --

JPM JPM Price (LC)

Company Ticker Analyst Rating 5/26/2023 2022 2023E 2024E 1-yr 2-yr 5-yr 2022 2023E 2024E

Consumer Health

Beiersdorf BEI GR Pannuti N 123.90 112 33.9x 31.6x 28.7x 28.6x 29.0x 28.8x 0.9% 2.6% 2.7%

Bayer BAYN GR Vosser N 54.32 60 6.8x 7.7x 7.1x 7.1x 7.4x 8.4x 5.8% 7.1% 11.1%

Haleon HLN LN Pannuti UW 3.30 3 17.9x 18.3x 16.9x 16.0x 16.0x 16.0x 5.3% 5.0% 5.7%

Reckitt Benckiser Group RKT LN Pannuti OW 64.16 75 18.8x 18.8x 17.4x 17.7x 18.6x 19.2x 4.4% 5.4% 6.1%

Sanofi SAN FP Vosser OW 99.40 105 12.0x 12.1x 11.2x 11.0x 11.8x 12.6x 6.6% 6.6% 7.6%

Unilever ULVR LN Pannuti UW 41.69 39 16.2x 16.4x 15.2x 17.7x 17.7x 18.7x 5.3% 6.3% 6.7%

AVERAGE 17.6x 17.5x 16.1x 16.4x 16.8x 17.3x 4.7% 5.5% 6.6%

WTD. AVERAGE 15.6x 15.6x 14.4x 15.0x 15.4x 16.2x 5.3% 6.0% 7.1%

HPC & Beauty

Colgate-Palmolive CL Teixeira OW 76.21 87 25.7x 24.3x 22.2x 24.0x 23.8x 23.5x 2.9% 4.0% 4.5%

Procter & Gamble PG Teixeira OW 145.40 168 25.5x 23.9x 21.9x 23.5x 23.9x 23.0x 3.4% 4.5% 4.7%

Church & Dwight CHD Teixeira UW 93.97 86 31.6x 30.2x 27.9x 26.7x 27.7x 27.4x 3.1% 3.0% 3.7%

Kimberly-Clark KMB Teixeira UW 136.30 139 24.2x 21.8x 19.6x 20.9x 20.3x 18.9x 4.0% 4.5% 4.9%

Clorox CLX Teixeira UW 159.09 158 38.3x 30.2x 26.3x 30.4x 28.7x 26.3x 3.7% 3.9% 4.4%

Newell Brands NWL Teixeira OW 8.73 14 5.6x 9.0x 6.8x 10.0x 11.3x 11.4x -16.2% 12.3% 15.9%

Estee Lauder EL Teixeira OW 194.44 224 37.2x 56.6x 32.9x 35.0x 37.5x 35.2x 1.4% 1.7% 3.5%

e.l.f. ELF Teixeira OW 101.28 102 74.5x 53.4x 51.4x 44.2x 40.4x 36.0x 1.4% 1.8% 2.3%

L'Oreal OR FP Pannuti N 411.00 400 36.5x 34.2x 31.3x 31.2x 35.5x 33.6x 2.2% 3.1% 3.3%

Olaplex OLPX Teixeira UW 3.29 5 7.3x 12.9x 10.9x 17.2x 26.1x 26.1x 11.8% 11.6% 10.4%

Reynolds Consumer Products REYN Teixeira OW 27.11 31 21.2x 20.2x 17.6x 18.7x 17.6x 16.9x 1.6% 6.8% 5.6%

Coty COTY Teixeira N 11.03 12 31.5x 20.1x 22.6x 23.2x 28.4x 24.2x 4.8% 3.6% 5.7%

AVERAGE 29.9x 28.1x 24.3x 25.4x 26.8x 25.2x 2.0% 5.1% 5.7%

WTD. AVERAGE 30.3x 29.9x 25.8x 26.8x 28.4x 27.1x 2.8% 3.8% 4.2%

MEDIAN 28.6x 24.1x 22.4x 23.7x 26.9x 25.2x 3.0% 3.9% 4.6%

Kevnue KVUE Teixeira OW 26.30 29.00 22.3x 23.8x 23.1x -- -- -- 4.0% 4.8% 4.9%

JPM Price

Target

EV/EBITDA

JPM Price

Target

P/E Hist. FwdP /E Avg. FCF Yield

Hist. Fwd EV/EBITDA Avg.

Source: Company reports, Bloomberg Finance L.P., and J.P. Morgan estimates.

This document is being provided for the exclusive use of DAVID WANG at MARLOWE PARTNERS LP.

37

Andrea Teixeira, CFA AC

(1-212) 622-6735

andrea.f.teixeira@jpmorgan.com

North America Equity Research

29 May 2023 J P M O R G A N

Price Target Derivation

We see investors gravitating toward EV/EBITDA to inform valuation for KVUE given

that the company􀋖s treatment of amortization of definite life intangible assets will make

P/E less comparable to peers based on what the company will report as its adjusted

earnings, although we will also present an EPS including amortization of definite life

intangibles to make the comparison more apples to apples. We also added a discounted

cash flow valuation to where the stock could trade over the medium to longer term as

the company continues to execute against its growth priorities and improves margins.