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Kenvue Stock Under Siege: Trump's Tylenol Warning Rekindles Autism Lawsuits, But Retail Bulls Hold Firm

  • Nishadil
  • September 25, 2025
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Kenvue Stock Under Siege: Trump's Tylenol Warning Rekindles Autism Lawsuits, But Retail Bulls Hold Firm

Kenvue, the consumer health giant recently spun off from Johnson & Johnson, finds itself caught in an intensifying legal storm, with its stock, KVUE, facing significant headwinds. The culprit? A dramatic resurgence of autism-related lawsuits targeting its flagship pain reliever, Tylenol (acetaminophen), a revival powerfully amplified by recent controversial remarks from former President Donald Trump.

Trump's comments at a rally, where he unequivocally stated that Tylenol causes autism, have breathed new life into a legal battle that Johnson & Johnson had painstakingly tried to distance itself from.

For years, plaintiffs' lawyers have sought to link the popular over-the-counter medication to autism spectrum disorder and ADHD, alleging that manufacturers failed to warn pregnant mothers about potential risks. While a federal multidistrict litigation (MDL) previously saw Judge Denise Cote dismiss these cases due to a perceived lack of robust scientific evidence, the narrative is now shifting, and the legal landscape for Kenvue is looking increasingly precarious.

The strategic spin-off of Kenvue was, in part, an effort by J&J to insulate its core pharmaceutical business from these very liabilities.

However, the legal eagles representing plaintiffs have found a new angle of attack. Instead of directly challenging the manufacturers in federal court, they are now targeting major retailers such as Walmart, CVS, and Walgreens in state courts. The contention? That these retailers, by selling Tylenol without adequate warnings about potential risks to fetal development, bear responsibility.

This tactic cleverly bypasses the federal MDL rulings, opening a fresh Pandora's Box of litigation.

The implications for Kenvue are profound. As the primary entity holding the Tylenol brand, it will inevitably be drawn into these new state-level disputes, potentially facing immense legal costs and reputational damage.

Short interest in KVUE stock has reportedly been on the rise, signaling growing skepticism among institutional investors who foresee a prolonged and costly legal battle. Analysts are bracing for a tough period, with the specter of substantial settlements or adverse judgments looming large.

Yet, amidst this swirling uncertainty, a curious phenomenon persists: the resilience of the retail investor.

Despite the mounting legal pressure and analysts' warnings, a segment of retail bulls remains unfazed. Many see Kenvue, with its portfolio of iconic brands like Tylenol, Listerine, and Neutrogena, as a fundamentally strong consumer staple, a "buy the dip" opportunity. They often draw parallels to other established brands that have weathered controversies, believing Kenvue's long-term value will ultimately prevail.

Their conviction highlights a stark contrast in market sentiment between the cautious institutional money and the often more speculative, long-term outlook of individual traders.

The road ahead for Kenvue is undoubtedly fraught with challenges. The combination of renewed legal pressure, fueled by high-profile public comments, and a new, decentralized legal strategy by plaintiffs' lawyers suggests that the company will be navigating a complex and potentially expensive legal minefield for the foreseeable future.

Investors, both institutional and retail, will be watching closely as this high-stakes drama unfolds, determining whether Kenvue can truly emerge unscathed from this latest Tylenol turmoil.

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