Kenvue (NYSE:KVUE) stock experienced a pre-market surge of 5% following a court's favorable ruling in a class action lawsuit related to Tylenol.
Judge Cote issued an order excluding the plaintiff's expert opinions in the Kenvue case. This development eliminates the admissibility of evidence supporting claims that prenatal exposure to acetaminophen causes Autism Spectrum Disorder (ASD) or Attention Deficit Hyperactivity Disorder (ADHD) in offspring.
The judge said that without admissible evidence from the plaintiffs, the case lacks the basis to proceed to trial.
Analysts said this represents a significant victory for Kenvue, as the exclusion of expert opinions weakens the plaintiffs' case, making it unlikely to proceed to trial.
On the other hand, some analysts warn that the company's legal risk is not entirely eliminated with this update.
"This should be a major relief to investors as KVUE's overhang has now been lifted,” analysts from Canaccord Genuity said.
Analysts from JPMorgan added that the latest ruling “effectively collapses the plaintiffs’ case in the multi-district litigation,” and subsequently added the stock to “the Analyst Focus List as a Value Idea.”