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Kimberly-Clark: Analysts’ Recommendations and Target Price

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Ratings summary and target price

Most analysts covering Kimberly-Clark (KMB) maintain a “neutral” outlook on the company’s stock. Kimberly-Clark is expected to report muted sales growth in upcoming quarters. Benefits from new and innovative products are expected to be offset by lower net selling prices, a slow down in category growth, and increased competition. Reduced sales in North America and challenges in China (FXI), Brazil, and Europe restrict top line growth. The company’s margins are projected to grow at a slower rate because higher commodity costs pose challenges.

On average, analysts rated Kimberly-Clark stock as a 3.0 on a scale of one (that indicates “strong buy”) to five (or “strong sell”). Of the 15 analysts who provided recommendations on Kimberly-Clark, 7.0% maintained a “buy,” 86.0% recommended a “hold,” and 7% recommended a “sell.”

Analysts maintain a 12-month target price of $132.00 on Kimberly-Clark stock, which represents potential upside of 5.9% based on the closing price of $124.69 as of July 17, 2017.

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Peer comparison

Of the 21 analysts who rated Procter & Gamble (PG), 38.0% provided a “buy” rating on the stock. 52.0% recommended a “hold,” and 10.0% maintained a “sell” rating. Meanwhile, of the 22 analysts covering Colgate-Palmolive (CL), 14.0% have a “buy” recommendation on the stock and 86.0% maintained a “hold.” For Clorox (CLX), 11.0% of the 18 analysts covering the stock recommended a “buy,” 78.0% recommended a “hold,” and 11.0% maintained a “sell.”

Valuation summary

As of July 17, 2017, Kimberly-Clark stock was trading at a 12-month forward PE (price-to-earnings) ratio of 19.7x, which is well below the peer average of 24.3x. However, the company is trading at a higher multiple compared to the S&P 500 Index’s (SPX-INDEX) current forward PE multiple of 18.1x. On the same date, Procter & Gamble, Clorox, Colgate-Palmolive, and Church & Dwight (CHD) were trading at forward PE multiples of 21.8x, 23.6x, 24.4x, and 27.5x, respectively.

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