KMB: Future Upside Will Be Driven By The Kenvue Acquisition

Kimberly-Clark's analyst price target has been revised downward from approximately $137 to $129 per share, as analysts account for increased risk tied to the Kenvue acquisition. Analysts have also noted recent upgrades and changes in the company’s growth outlook.

Analyst Commentary

Recent analyst sentiment on Kimberly-Clark reflects a balance of optimism about the company’s long-term prospects and caution related to near-term execution and deal risks. The perspectives are shaped by the company's growth updates, valuation changes, and the implications of the Kenvue acquisition.

• Bullish analysts view the Kenvue acquisition price as attractive, noting the quality of the acquired brands and the potential to enhance Kimberly-Clark's growth profile over time.
• Recent upgrades to Buy ratings and incremental price target increases suggest rising confidence that the stock is undervalued after its pullback.
• Some analysts highlight Kimberly-Clark’s resilience in organic sales, particularly in the face of competitive dynamics in core categories. This indicates a more favorable outlook for earnings stability.
• Improved visibility regarding the outcome of key legal and portfolio issues could draw additional investor interest and solidify the strategic upside of the Kenvue transaction.

• Bearish analysts have cited execution risks associated with integrating Kenvue, particularly given uncertainties in segments of the acquired portfolio.
• Several price target reductions reflect concern about muted and decelerating growth trends in parts of the personal care space. These trends could weigh on future valuation multiples.
• There is a sense of caution regarding the potential impact of competitive pressures, especially in the U.S. diaper market, on Kimberly-Clark’s ability to sustain organic revenue growth.
• Uncertainty around the deal’s closure and the possibility of competing bids or legal complications are seen as near-term headwinds that cloud the outlook.

What's in the News

• Kimberly-Clark's acquisition of Kenvue helped activist investor D.E. Shaw, a major Kenvue shareholder, avoid significant losses. Other key investors such as Toms Capital and Starboard Value are also impacted by the deal (WSJ).
• The company updated its 2025 earnings guidance, projecting organic sales growth to align with their market average of approximately two percent. It expects adjusted operating profit and earnings per share to grow at a low-to-mid single digit rate despite headwinds from divestitures and higher costs.
• Kimberly-Clark completed an $18 million share repurchase during the third quarter of 2025. This brings its total buybacks under the ongoing program to over 9 million shares, or 2.74% of shares outstanding.
• The company announced $28.7 million in strategic charitable partnerships to improve women’s and girls’ health globally. It aims to reach 24 million people over the next three years through organizations such as Baby2Baby, Plan International, Project HOPE, and UNICEF.

Valuation Changes

• The Fair Value Estimate has decreased from $137.22 to $128.63 per share, reflecting a lowered consensus on the company's intrinsic value.
• The Discount Rate has risen slightly from 6.78% to 6.96%, indicating a modest increase in perceived risk or required return by analysts.
• Revenue Growth projections have reversed direction, increasing from an expected decline of -3.55% to an anticipated growth of 7.01%.
• Net Profit Margin estimates have fallen significantly from 15.08% to 11.10%, signaling a more conservative outlook on future profitability.
• Future P/E Ratio expectations have slightly decreased from 20.47x to 19.18x, suggesting a more measured view on the company's earning potential relative to price.