Kimberly-Clark (KMB) has limited upside until stronger visibility on performance metrics is achieved and investor sentiment remains negative due to year-to-date underperformance, UBS Securities said in an earnings preview emailed Friday.
The company's Q4 earnings are scheduled for Jan. 28.
The firm said that headwinds from private-label divestitures and foreign exchange impacts are expected to offset the company's growth further in 2025 leading to a projected sales decline of 4.5% year over year, while margins will expand due to productivity gains.
Kimberly-Clark's ability to show sequential improvement in organic revenue growth is a critical point for investors and there is speculation about whether retailer-driven timing benefits, similar to those seen by Procter & Gamble (PG) in its Family Care business, could result in better-than-expected performance, but this remains uncertain, UBS added.
The brokerage has a neutral rating on Kimberly-Clark's stock with a price target of $132.
Price: 128.09, Change: +1.06, Percent Change: +0.84
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