Kenvue (KVUE) reported Q4 results that came in "better than feared", driven by stronger-than-expected organic sales growth, improved margins, and a favorable tax rate, UBS Securities said in a Wednesday note.

While the quarter exceeded consensus expectations, much of the upside was attributed to timing factors and international consumption, which may not necessarily indicate a sustained trend. The brokerage said the backdrop for the business remains challenged due to weaker consumption trends in the US.

The investment firm highlighted that the quarter may elicit a more favorable view of the company's trajectory but investors are likely to take a wait-and-see approach to determine whether Kenvue is on a better path compared with recent years.

Favorable timing dynamics contributed meaningfully to the results, including international sales performance, while segment-level trends showed mixed performance, according to the note.

UBS maintained the company's stock rating at neutral and raised the price target to $19 from $17.

Shares of Kenvue were up nearly 3% in recent trading.

Price: 18.93, Change: +0.52, Percent Change: +2.82