Kimberly-Clark (KMB): Assessing Valuation Following Q3 Earnings Drop and New 2025 Outlook

Kimberly-Clark (KMB) just released its third quarter earnings, showing net income fell compared to the same period last year. The company also updated its 2025 outlook, taking into account recent divestitures and setting expectations for modest sales and profit growth.

See our latest analysis for Kimberly-Clark.

Kimberly-Clark’s share price has lost ground this year, with a year-to-date drop of 8.4% and a 7.7% total shareholder return decrease over the past twelve months. While the company’s recent buybacks signal confidence and its updated guidance gives clarity following recent divestitures, momentum has faded as investors weigh lower earnings and shifting expectations for growth. Still, its three-year total shareholder return stands positive, indicating some underlying resilience for long-term holders.

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Given the tempered growth forecasts and recent dip in share price, the big question is whether Kimberly-Clark is now trading at a discount or if the current valuation already reflects all future prospects, leaving little room for upside.

Most Popular Narrative: 12.8% Undervalued

Based on the most widely followed narrative, Kimberly-Clark’s consensus fair value sits comfortably above its last close. Analysts believe that the market is underestimating future margin gains and operational improvements. The gap between the latest close and the narrative’s calculated fair value creates a case for near-term upside, supported by key projections and strategic shifts.

Strategic refocus on higher-growth, higher-margin North America and International Personal Care segments (post-Suzano JV) is expected to accelerate revenue and gross margin growth. This is aligned with long-term demographic shifts such as aging populations requiring more adult care and healthcare-related products.

Read the complete narrative.

Want to know the quantitative engine behind this valuation? The narrative is banking on a strategic pivot, future margin increases, and confidence in profit resilience. Which financial levers and management moves tip the scale? Explore the hidden drivers and assumptions that lead analysts to see potential upside.

Result: Fair Value of $137.22 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, heightened competition from private labels and softer global consumer demand could easily challenge Kimberly-Clark’s pricing power and limit anticipated margin gains.

Find out about the key risks to this Kimberly-Clark narrative.

Another View: Multiples Paint a Different Picture

While consensus targets and narratives suggest Kimberly-Clark is undervalued, a look through the lens of earnings multiples gives a less favorable view. The company's 20.2x ratio is higher than the global industry average of 17.6x, putting it at a premium. Peer comparisons and even our fair ratio of 21.8x highlight some room, yet the market’s current stance may already reflect much of the anticipated improvement. With this premium, is there enough margin of safety left for buyers?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Kimberly-Clark Narrative

If the current consensus doesn’t match your take, or you’d rather form an independent view, you can create your own narrative for Kimberly-Clark in just a few minutes. Do it your way

A great starting point for your Kimberly-Clark research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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