Kimberly-Clark Dividend Muting Analyst Downgrade (KMB)
Kimberly-Clark Corporation (NYSE: KMB) is being downgraded on valuation and on margin issues by Janney Capital Markets. The firm cut the rating to ‘Neutral’ from Buy and lowered its fair value price target objective to $74.00 from a prior price…
Kimberly-Clark Corporation (NYSE: KMB) is being downgraded on valuation and on margin issues by Janney Capital Markets. The firm cut the rating to ‘Neutral’ from Buy and lowered its fair value price target objective to $74.00 from a prior price of $79.00. The downgrade called the margin potential as still being sizeable, but it says that it is just less visible now.
Janney’s downgrade reflects a right-sized discount and diminished margin visibility. The firm noted, “Our belief that the risk/reward is appropriately balanced reflects an above-average geographic footprint, above-average margin upside potential, and participation in essential staple categories. Offsetting these investment advantages are less margin visibility (as the margin opportunity has shifted from certain discrete items to the less cyclical personal care business), diminished mix benefit (as the “gem” personal care segment has lost profitability), and a nearly-average valuation (14.1x P/E vs. peers’ 14.5x).”
The $74.00 price valuation now is a 5% enterprise value against the EBITDA discount to a historical average.
The stock is down only 0.4% at $71.32 and the consensus price target objective from Thomson Reuters is $74.46. The dividend yield of 3.9% is keeping investors interested more than if the dividend was lower.
JON C. OGG
Contact [email protected] for any questions or corrections.
Jon Ogg has been a financial news analyst since 1997. Mr. Ogg set up one of the first audio squawk box services for traders called TTN, which he sold in 2003. He has previously worked as a licensed broker to some of the top U.S. and E.U. financial institutions, managed capital, and has raised private capital at the seed and venture stage. He has lived in Copenhagen, Denmark, as well as New York and Chicago, and he now lives in Houston, Texas. Jon received a Bachelor of Business Administration in finance at University of Houston in 1992. www.247wallst.com.
