Is Kimberly-Clark’s Stock Fairly Priced?

Kimberly-Clark (NYSE: KMB) is one of the leading producers of professional and consumer tissue, baby care products, female hygiene care, and disposable healthcare products, with a presence in 175 countries.

Trefis has a price estimate of $136 per share for Kimberly Clark’s stock, compared to its current price of $138.

You can view our interactive dashboard analysis – Kimberly-Clark: Expensive or Cheap?

We can break down the stock price estimate into 4 factors: Stock Price = (Total revenue x Net income margin / No. of shares outstanding) x P/E Ratio

A] Estimating Total Revenue

We expect Kimberly-Clark’s revenues to remain largely level around $18.5 billion over the next 2 years.

Additional information about trends in revenue sources over recent years and the rationales behind our forecast are available in our detailed dashboard for Kimberly Clark’s Revenue.

B] Estimating Net Income using Net Margins

• Net Income Margins fell from 12.4% in 2017 to 7.6% in 2019, on the back of growing pulp prices driving up the cost of revenue.
• We expect pulp prices to keep rising in the near term, but the company’s efforts to cut costs should slightly support net margins.
• However, amidst foreign exchange challenges we don’t see net margins getting back to 2017 levels anytime soon.

C] Estimating EPS using shares outstanding

• EPS dropped from $6.03 in 2016 to $4.05 in 2018.
• Steady net income growth hereon, and share repurchases, could drive EPS up to $5.55 by 2020.

D] Estimating share price using P/E multiple

We have estimated a P/E multiple of around 24.5x for Kimberly Clark’s stock, putting our stock price estimate to about $136.

What’s behind Trefis? See How It’s Powering New Collaboration and What-Ifs

For CFOs and Finance Teams | Product, R&D, and Marketing Teams

More Trefis Data

Like our charts? Explore example interactive dashboards and create your own.