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Kenvue Inc. (KVUE) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Kenvue Inc. (KVUE)

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Intrinsic Value (DCF)

Current$17.26
→
Intrinsic$16.35
-5%
$9.87$16.35$28.64
Market implies 22% growth for 5 years
KVUE appears fairly valued — current price aligns with our DCF estimate.
At $17, the market prices in continued strong cash flow growth (22%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $10 → Bull $29. Current price implies expectations above the base case, closer to bull expectations.
Discount ↓Growth →16%18%20%22%
8%$21$23$25$27
10%$13$15$16$18
12%$9$10$12$13
14%$7$8$8$9

Bull Case

  • Bull case ($29) offers 66% upside at 24% growth, 9% discount

Bear Case

  • Bear case ($10) implies 43% downside at 16% growth, 12% discount
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5-Year Free Cash Flow Projection

Year 1$1.60B
Year 2$1.92B
Year 3$2.31B
Year 4$2.77B
Year 5$3.32B
Terminal$48.88B

📐 Model Inputs

Growth Rate20.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$1.33BTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is KVUE stock undervalued or overvalued?
🟡 FAIRLY VALUED

KVUE trades at $17.26, within 10% of our $16.35 intrinsic value estimate. At 10.0% WACC and 20.0% FCF growth, the market is pricing in assumptions roughly aligned with the 5-year historical CAGR. The valuation range spans $9.35 (bear) to $26.64 (bull).

What is KVUE's intrinsic value?

Using a 5-year DCF model: Base FCF of $1.33B, projected at 20.0% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $7.65B net debt and dividing by 1.92B shares: Bear $9.35 | Base $16.35 | Bull $26.64. Current price $17.26 implies -2% to base case.

How is KVUE's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 20.0% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($39.08B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 29.3x.