Kimberly-Clark Stock Bullish Trend Turning Bearish? KMB

Kimberly-Clark Corporation’s (NYSE: KMB) stock reached its 52-week high of $147.87 in May 2023, but recent trends reveal a decrease in its gains. This comes as the company reports an impressive earnings report and updates its full-year revenue and earnings outlook, despite the cost of inflation on their most popular consumer products. Understandably so, this performance has opened the floor for analysts to reassess their ratings and price targets for KMB stock as they anticipate an improvement in investor sentiment.

Key Points

1. Kimberly-Clark’s stock has experienced a decrease due to a shift in investor sentiment from value stocks to growth stocks despite good company performance. The company announced better-than-expected profits and raised its full-year outlook for both revenue and earnings.
2. Kimberly-Clark, a major consumer staples company known for iconic brands such as Huggies and Kleenex, demonstrated pricing power amidst concerns of consumer down-trading due to inflation. Their revenue and earnings per share figures were in line or exceeded analyst estimates.
3. Despite strong earnings, stock market analysts seem cautious. As of July 2023, the consensus rating for Kimberly-Clark stock is “Reduce” with a price target slightly below its current price. However, with rising profits and new guidance from the company, analysts may reconsider their price targets. The dividend yield for the company is currently at 3.54%, offering a quarterly payout of $1.18.

KMB Stock Shows Downward Trend Despite Strong Earnings Report

In May 2023, Kimberly-Clark Corporation (NYSE: KMB) stock reached a 52-week high of $147.87. Fast forward to July, the stock takes a downturn to negative territory for the year. But what caused this sudden fall?

Without any negative news to justify this sell-off, something else must be at play. Could the shift of investor sentiment from value stocks to growth stocks be the reason for the slump of KMB stock? Let’s dig a little deeper.

  • KMB stock has trended lower as investors shift from value stocks to growth stocks.
  • No negative news to explain the sell-off, inferring a shift in investor sentiment.
  • Kimberly-Clark reported better-than-expected profits and raised its full-year outlook for both revenue and earnings.
  • The strong results might make analysts reconsider their ratings and price targets for KMB stock.

Kimberly-Clark’s Performance as a Consumer Proxy

You probably know Kimberly-Clark as the home of some of the world’s most iconic brands like Huggies and Kleenex. As these products are consumer staples, the company is considered a good proxy for the consumer. Did they manage to maintain their pricing power as inflation increases, pushing more consumers to shift to private label brands?

It seems like they did. The company’s strong Q2 earnings report shows not all consumers are trading down. Their topline revenue matched analysts’ estimates at $5.13 billion, about 1% higher than the same quarter in 2022. But the real question now is, will it be enough to turn investor sentiment around?

Investment Perspective – What Does This Mean For Investors?

As we head into the Federal Reserve’s interest rates hike, could this be the turning point for KMB stock? Maybe yes, maybe not. The current AlphaBetaStock’s analyst ratings of ‘Reduce’ for KMB stock points to a 2% lower consensus price target than its July 24 closing price.

However, Kimberly-Clark’s strong earnings report and revised upward full-year outlook might persuade analysts to reconsider their stance. After all, KMB stock is just around 0.5% below its 10-, 20-, and 50-day moving averages.

Should You Consider Kimberly-Clark?

That depends on how the market reacts to the latest earnings report and the forthcoming interest rate hike. What is certain is that Kimberly-Clark is expected to support its current dividend yield of 3.54%, which currently pays out $1.18 per quarter. Will this be enough to attract more value investors to Kimberly-Clark?

Just one thing to note. AlphaBetaStocks’s top-rated analysts are recommending their clients purchase five other stocks besides Kimberly-Clark. Could these five be better options? Onwards towards smarter investment choices with the power of knowledge!

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