Skip to main content

Market Overview

Morgan Stanley To Kimberly-Clark Investors: These Headwinds Are Too Notable To Ignore

Share:
Morgan Stanley To Kimberly-Clark Investors: These Headwinds Are Too Notable To Ignore

Personal care giant Kimberly Clark Corp (NYSE: KMB), the parent company behind brands like Kleenex and Huggies disposable diapers, faces fundamental pressures that will grow over the years, according to Morgan Stanley.

The Analyst

Morgan Stanley's Dara Mohsenian initiated coverage of Kimberly Clark's stock with an Underweight rating and $94 price target.

The Thesis

Kimberly Clark's multiple headwinds include a growing competitive environment especially in the large diaper category, a "refocused" rival in Procter & Gamble Co (NYSE: PG), retailers pushing their own private labels and competition in China where Kimberly Clark has a presence.

These headwinds are confirmed by Euromonitor, whose data shows the company's market share in all of its product categories have been declining at an accelerating rate since 2013, the analyst said.

The company's pressure points could result in the company's longer-term financial metrics falling short of expectations. Organic top line growth beyond fiscal 2018, for example, could come in at just 1-1.5 percent versus management's own 3-5 percent long-term target and a 2.25 percent consensus estimate through fiscal 2020.

There's not only risk to Kimberly-Clark missing its fiscal 2018 EPS guidance, but the company could see 4-5 percent of potential EPS downside versus consensus estimates throughout at least the next three years.

Price Action

Shares of Kimberly Clark were down about 1.6 percent at $99.98 Thursday afternoon.

Related Links:

Kimberly Clark Catches A Downgrade Ahead Of A 'Double Hazard'

Next Year Will Be Weak For Kimberly Clark; Analyst Says Buy The Stock Anyway

Latest Ratings for KMB

DateFirmActionFromTo
Jan 2021RBC CapitalMaintainsSector Perform
Jan 2021Argus ResearchDowngradesBuyHold
Jan 2021B of A SecuritiesMaintainsBuy

View More Analyst Ratings for KMB
View the Latest Analyst Ratings

 

Related Articles (KMB)

View Comments and Join the Discussion!

Posted-In: China Dara Mohsenian Huggies KleenexAnalyst Color Price Target Initiation Analyst Ratings Best of Benzinga

Latest Ratings

StockFirmActionPT
FSRMorgan StanleyMaintains40.0
NATJefferiesMaintains2.8
MEDDA DavidsonMaintains302.0
VICRBWS FinancialMaintains120.0
PSXMizuhoMaintains96.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
SPAC
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com