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1. Company Snapshot

1.a. Company Description

Kimberly-Clark Corporation, together with its subsidiaries, manufactures and markets personal care and consumer tissue products worldwide.It operates through three segments: Personal Care, Consumer Tissue, and K-C Professional.The Personal Care segment offers disposable diapers, swimpants, training and youth pants, baby wipes, feminine and incontinence care products, and other related products under the Huggies, Pull-Ups, Little Swimmers, GoodNites, DryNites, Sweety, Kotex, U by Kotex, Intimus, Depend, Plenitud, Softex, Poise, and other brand names.


The Consumer Tissue segment provides facial and bathroom tissues, paper towels, napkins, and related products under the Kleenex, Scott, Cottonelle, Viva, Andrex, Scottex, Neve, and other brand names.The K-C Professional segment offers wipers, tissues, towels, apparel, soaps, and sanitizers under the Kleenex, Scott, WypAll, Kimtech, and KleenGuard brands.The company sells household use products directly to supermarkets, mass merchandisers, drugstores, warehouse clubs, variety and department stores, and other retail outlets, as well as through other distributors and e-commerce; and away-from-home use products directly to manufacturing, lodging, office building, food service, and public facilities, as well as through distributors and e-commerce.


Kimberly-Clark Corporation was founded in 1872 and is headquartered in Dallas, Texas.

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1.b. Last Insights on KMB

Kimberly-Clark Corporation faces challenges, including currency and cost pressures, ahead of its Q3 results. The company's merger with Kenvue Inc. is under investigation by Halper Sadeh LLC, which may be perceived as a negative event. Additionally, despite solid volume gains and cost discipline, KMB's Q3 results highlight ongoing margin pressures. A significant sell-off following the merger announcement wiped out approximately $5.8 billion in market value, potentially reflecting investor concerns about the deal's fairness and impact on shareholder value.

1.c. Company Highlights

2. Kimberly-Clark Beats Expectations with Strong Q3 Earnings

The company's third-quarter financial performance was robust, with actual EPS coming in at $1.82, significantly beating analyst estimates of $1.45. Revenue growth was also strong, driven by sustained momentum from innovation and activation. The company's margin implications from increased promotional activity were managed effectively, with gross margins expected to expand in Q4 due to mitigating actions on tariffs. However, operating profit margin will be lower due to increased marketing investments.

Publication Date: Nov -01

📋 Highlights
  • Volume/Mix Growth Continuity: Achieved seventh consecutive quarter of volume plus mix growth, with 2.2% growth in North America year-to-date and 2.9% on a 2-year stack basis.
  • Diaper Market Share Gains: Secured 10 basis points of share in Q3 2023 and 90 basis points year-to-date amid increased promotional strategy shifts.
  • Margin Management: Anticipated $70 million gross tariff reduction and $50 million in mitigating actions, offsetting margin pressures in 2023.
  • Premium Segment Growth: Delivered 2.2% volume/mix growth in North America, with sustained momentum in premium and ultra-premium categories.
  • 2026-2027 P&L Targets: Aiming for organic growth ahead of categories and long-term constant currency operating profit growth aligned with their algorithm.

Revenue Growth Drivers

The company's volume and mix growth continued to drive revenue, with a seventh consecutive quarter of volume plus mix-led growth. In North America, the company's performance was stronger than expected, driven by innovation and activation. The company is meeting consumers in every channel, including e-commerce and club, where they experienced strong growth. As Russell Torres emphasized, "We're focused on meeting consumers' needs, and despite their purchasing power being under pressure, our essential categories with low substitution remain resilient."

Margin Expansion and Cost Management

The company's commodity outlook has improved, with a $70 million reduction in gross tariffs and $50 million in mitigating actions. The partnership with Suzano has stabilized fiber costs, and the integrated margin management approach has allowed the company to proactively manage volatility. The company is confident in its ability to attain its milestone margin targets before the end of the decade.

Valuation and Growth Prospects

With a P/E Ratio of 26.13 and an EV/EBITDA of 14.42, the company's valuation appears reasonable considering its growth prospects. Analysts estimate next year's revenue growth at 2.3%, which is in line with the company's guidance to grow largely in line with the categories. The company's dividend yield of 4.18% and free cash flow yield of 6.08% also make it an attractive investment opportunity.

Return on Investment and Debt Profile

The company's ROIC of 23.92% and ROE of 134.07% indicate a strong return on investment. The net debt to EBITDA ratio of 1.85 is manageable, and the company's ability to generate cash is evident in its free cash flow yield. Overall, the company's financial performance and growth prospects make it an attractive investment opportunity.

3. NewsRoom

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Kimberly-Clark Corporation (KMB) Presents at Morgan Stanley Global Consumer & Retail Conference 2025 Transcript

Dec -03

Source: seekingalpha.com

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KMB Accelerates Growth Through Digital & Club Channel Expansion

Dec -03

Source: zacks.com

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Kimberly-Clark: An Undervalued Dividend Aristocrat For Income-Seeking Investors

Nov -24

Source: seekingalpha.com

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Kimberly-Clark To Webcast Its Presentation At Morgan Stanley's Global Consumer & Retail Conference

Nov -21

Source: prnewswire.com

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Kimberly-Clark Declares Quarterly Dividend

Nov -20

Source: prnewswire.com

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Don't Give Up on Dividend Stocks. 5 Dividend Kings Down Between 5% and 33% to Buy in November

Nov -19

Source: fool.com

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4 Ideal November Buys In Barron's 100 Sustainable Dividend Dogs Of 47 'Safer'

Nov -13

Source: seekingalpha.com

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4 Highest Yielding Dividend Stocks in the Nasdaq Composite

Nov -12

Source: 247wallst.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.39%)

6. Segments

North America

Expected Growth: 2.2%

North America's growth of 2.2% for Kimberly-Clark Corporation is driven by increased demand for consumer staples, pricing strategies, and market share gains in tissue and hygiene products. Operational efficiency and cost savings also contribute to this growth, reflecting the segment's resilience and effective management in a competitive market.

International Personal Care

Expected Growth: 2.5%

Kimberly-Clark's International Personal Care segment growth of 2.5% is driven by increased demand for hygiene products, expansion in emerging markets, and successful product innovations. The company benefits from a strong brand portfolio, including Huggies and Kotex, and strategic pricing initiatives. Operational efficiency and cost management also contribute to the segment's growth.

International Family Care & Professional

Expected Growth: 2.8%

The 2.8% growth in International Family Care & Professional segment of Kimberly-Clark Corporation is driven by increased demand for hygiene products, expansion into emerging markets, and premiumization of products. Additionally, strategic pricing and cost-saving initiatives have contributed to the segment's growth, reflecting the company's ability to adapt to changing consumer needs and maintain market share.

7. Detailed Products

Huggies Diapers and Wipes

Huggies offers a range of diapers and wipes for babies and toddlers, providing absorbency and comfort for little ones.

Scott Tissues

Scott Tissues provides a variety of paper products, including toilet paper, paper towels, and tissues for household use.

Kleenex Facial Tissues

Kleenex offers a range of facial tissues for blowing noses, wiping away tears, and cleaning up small messes.

Cottonelle Toilet Paper

Cottonelle provides a range of toilet paper products, offering comfort, absorbency, and durability for bathroom use.

U by Kotex Feminine Care Products

U by Kotex offers a range of feminine care products, including pads, tampons, and liners, designed for women's hygiene and comfort.

All Good and Depend Adult Diapers

All Good and Depend offer a range of adult diapers and incontinence products, providing comfort, absorbency, and dignity for adults with bladder or bowel issues.

8. Kimberly-Clark Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Kimberly-Clark Corporation operates in the consumer goods industry, specifically in the production of personal care and hygiene products. While there are substitutes available for some of its products, such as cloth diapers instead of disposable ones, the convenience and widespread use of its products make the threat of substitutes moderate. Consumers are generally loyal to brands they trust, and Kimberly-Clark's strong brand portfolio mitigates this threat.

Bargaining Power Of Customers

The bargaining power of customers for Kimberly-Clark Corporation is relatively low. The company sells its products to a wide range of customers, including large retailers, wholesalers, and consumers directly. No single customer accounts for a significant portion of its revenue, which limits their ability to negotiate prices or terms significantly.

Bargaining Power Of Suppliers

Kimberly-Clark Corporation sources raw materials such as pulp, cotton, and chemicals from various suppliers. While it has a significant volume of purchases, which can give it some bargaining power, the suppliers in the industry are numerous, and the company has strategies in place to manage costs and ensure supply. The bargaining power is thus medium.

Threat Of New Entrants

The threat of new entrants in the consumer goods industry, particularly in personal care and hygiene products, is high. The barriers to entry are relatively low, as new companies can be formed with innovative products or business models. Additionally, the market for these products is well-established, attracting new entrants. However, Kimberly-Clark's strong brand recognition and extensive distribution network act as deterrents.

Intensity Of Rivalry

The consumer goods industry, specifically the personal care and hygiene products segment, is highly competitive. Kimberly-Clark Corporation competes with major players like Procter & Gamble, Unilever, and Colgate-Palmolive. The competition is intense due to the similarity of products, high advertising and marketing expenses, and constant innovation. This intense rivalry drives companies to continuously improve and differentiate their offerings.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 90.02%
Debt Cost 4.35%
Equity Weight 9.98%
Equity Cost 6.37%
WACC 4.55%
Leverage 901.67%

11. Quality Control: Kimberly-Clark Corporation passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Kimberly-Clark

A-Score: 5.6/10

Value: 3.2

Growth: 4.4

Quality: 6.0

Yield: 8.0

Momentum: 2.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
Procter & Gamble

A-Score: 5.3/10

Value: 2.8

Growth: 4.4

Quality: 7.4

Yield: 5.0

Momentum: 2.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
Colgate-Palmolive

A-Score: 5.1/10

Value: 3.1

Growth: 4.9

Quality: 6.7

Yield: 5.0

Momentum: 1.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
Church & Dwight Co

A-Score: 4.7/10

Value: 2.4

Growth: 5.0

Quality: 6.9

Yield: 2.0

Momentum: 2.0

Volatility: 9.7

1-Year Total Return ->

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Stock-Card
Kenvue

A-Score: 4.6/10

Value: 4.3

Growth: 3.4

Quality: 6.2

Yield: 8.0

Momentum: 1.5

Volatility: 4.0

1-Year Total Return ->

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Stock-Card
Estee Lauder

A-Score: 2.9/10

Value: 3.3

Growth: 1.7

Quality: 2.7

Yield: 2.0

Momentum: 4.0

Volatility: 4.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

103.82$

Current Price

103.82$

Potential

-0.00%

Expected Cash-Flows