Kimberly-Clark (NYSE:KMB) shares are climbing today following the unveiling of a new operating model by the company, known for brands like Kleenex and Huggies. The model targets long-term growth through a strategic emphasis on accelerating innovation, optimizing margins, and focused execution.
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Focus on Growth and Efficiency
The company aims to grow 12 major brands that hold top positions in their respective categories and boost 80% of net sales in five categories with a combined addressable market of $240 billion. The focus areas include Baby & Child Care, Feminine Care, Adult Care, Family Care, and Professional segments.
Furthermore, Kimberly-Clark is leveraging technology and data analytics to enhance its supply chain and drive margin improvements. This initiative targets achieving more than $3 billion in gross productivity gains and $500 million in working capital savings.
Over the upcoming months, Kimberly-Clark plans to restructure its operations into three business segments: North America, International Personal Care (IPC), and International Family Care and Professional (IFP). This transition, scheduled for completion by year-end, is expected to generate SG&A savings of approximately $200 million in the following years.
Interestingly, KMB’s goal is to achieve 100% natural forest-free product offerings. By 2030, the company anticipates being more than halfway towards this objective.
Long-Term Outlook
In the long term, KMB is aiming to grow its adjusted operating profit and adjusted EPS in the mid-to-high single digits. For 2024, KMB anticipates organic net sales growth in the low-to-mid single digits. Adjusted EPS for the year is seen increasing in the high single digits. At the same time, KMB expects to incur $1.5 billion in restructuring and reorganization charges over the next three years.
What Is the Price Target for KMB?
KMB’s stock price has inched up by nearly 5% so far this year. Overall, the Street has a Hold consensus rating on Kimberly-Clark alongside an average KMB price target of $124.60.
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