Kimberly-Clark Corp. Moved to Conviction Sell (KMB)

Analysts at Goldman Sachs moved Kimberly-Clark Corp. (NYSE: KMB) to Conviction Sell and see 5% downside to the new 12-month price target of $57. The stock trades at a low multiple and has underperformed year-to-date. However, there is potential downside as sharp and prolonged increases in the price of pulp could lead to meaningful 4%-7% negative revisions to the consensus estimates for 2010-2011.

Analysts are forecasting that KMB will get 3% price realization in 2H2010 as a result of list increases, less promotion and sheet count reductions. They also see full recovery of the higher input costs as unlikely due to the more aggressive competitive stance from P&G and continued private label growth.

Goldman Sachs is lowering its price target by $3 to $57. This reflects their lower EPS forecasts and a cut in our target multiple to 11X-12X from 12X due to the cost uncertainty.

KMB is down less than a percent in very early trading to $59.88 per share. The stock has slumped in the last three months, likely leading to its Conviction Sell rating.