UPDATE: Bank of America Downgrades Kimberly Clark Corp. to Neutral, Raises PT on Fair Valuation

In a report published Monday, Bank of America analyst Christopher Ferrara downgraded the rating on Kimberly Clark Corp.

from Buy to Neutral, but raised the price target from $106.00 to $108.00. In the report, Ferrara noted, “We are downgrading KMB to Neutral from Buy following a 26% YTD move vs the S&P500 at +9% and the XLP at +17%. KMB is +41% over L12M. We remain bullish on growth prospects, but are maintaining valuation discipline despite this staples-led rally (we downgraded CL (A-2-7, $119.72) and MO (B-2-7, $35.02) to Neutral seven weeks ago). We have recommended KMB over the past 6m despite rising absolute valuation, on the view that valuation vs. peers had not closed enough to adequately reflect (1) improved underlying growth prospects vs. peers, and (2) better commitment to investment behind market expansion, innovation, and strategic marketing. This valuation view is harder to support, as the stock approaches our previous price objective. Based on 2013 P/Es, KMB's valuation gap with core staples stocks has now improved by 11pts over the 10yr avg (2% premium vs. 9% hist discount). KMB is trading at a 29% premium to the S&P vs to the 10y avg of a 1% premium.” Kimberly Clark Corp. closed on Friday at $106.10.