UPDATE: BMO Capital Markets Downgrades Kimberly Clark Corp. to Underperform, Raises PT on Rich Valuation

In a report published Friday, BMO Capital Markets analyst Connie M. Maneaty downgraded the rating on Kimberly Clark Corp.

from Market Perform to Underperform, but raised the price target from $83.00 to $92.00. In the report, Maneaty noted, “We are downgrading Kimberly-Clark to Underperform as we see no upside based on its current valuation. At $98.47, KMB is trading at 17.7x our 2013 estimate, at its highest forward P/E multiple since 2002, and well above historical averages, which range from 13.5x over the past 5 years to 15.4x over the last 15; its multiple expansion of more than two points above its 15-year average is one of the more exaggerated in our group. While investors are clearly willing to pay a premium for KMB's dividend, cash generation, and for consumer stocks in general, we do not believe KMB's fundamentals warrant new investment. Our 2013 estimate of $5.55 is slightly below the consensus of $5.60 and we note risks that include the impact of higher global tissue capacity, slightly rising pulp prices, and FX in Korea, which accounts for ~5% of total sales. In addition, its 2013 EPS growth of 6%-7% growth is about half the rate we expect for our universe.” Kimberly Clark Corp. closed on Thursday at $98.47.