Investors in Kimberly-Clark Corporation (NYSE:KMB) had a good week, as its shares rose 8.6% to close at US$136 following the release of its first-quarter results. Revenues were US$5.1b, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of US$1.91 were also better than expected, beating analyst predictions by 13%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Kimberly-Clark after the latest results.
Taking into account the latest results, Kimberly-Clark's 16 analysts currently expect revenues in 2024 to be US$20.5b, approximately in line with the last 12 months. Statutory earnings per share are predicted to surge 25% to US$6.83. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$20.5b and earnings per share (EPS) of US$6.79 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
The analysts reconfirmed their price target of US$137, showing that the business is executing well and in line with expectations. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Kimberly-Clark at US$167 per share, while the most bearish prices it at US$115. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Kimberly-Clark's revenue growth is expected to slow, with the forecast 0.5% annualised growth rate until the end of 2024 being well below the historical 2.5% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 3.5% per year. Factoring in the forecast slowdown in growth, it seems obvious that Kimberly-Clark is also expected to grow slower than other industry participants.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Kimberly-Clark's revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$137, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Kimberly-Clark going out to 2026, and you can see them free on our platform here..
Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Kimberly-Clark that you should be aware of.
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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.