Analyst Robert Moskow from TD Cowen maintained a Hold rating on Kimberly Clark and decreased the price target to $112.00 from $130.00.
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Robert Moskow has given his Hold rating due to a combination of factors surrounding Kimberly-Clark’s recent acquisition of Kenvue. The announcement led to a 14% drop in KMB’s stock, reflecting investor concerns about the uncertainties tied to Tylenol and UK talc litigation, as well as the challenges of stabilizing Kenvue’s declining business. The merger aims to create a $32 billion global health and wellness leader by combining complementary portfolios, but the complexity of integrating the two companies presents significant execution risks.
Despite the strategic potential of the acquisition, there are doubts about Kimberly-Clark’s ability to manage Kenvue’s diverse marketing challenges effectively. The company’s exposure to volatile pulp costs continues to affect its valuation, despite efforts to de-verticalize and exit low-margin businesses. While the stock might appear undervalued at a P/E ratio of 13.8x the projected EPS for 2027, the substantial risks associated with the acquisition and the need for successful integration justify the Hold rating.
In another report released today, TR | OpenAI – 4o also reiterated a Hold rating on the stock with a $108.00 price target.