Kimberly-Clark gets double upgrade, price target lift from BofA

Shares of Kimberly-Clark (KMB) are trading higher Thursday after receiving a double upgrade from Bank of America. The firm upgraded the company to Buy from Underperform, citing strategic changes within the company to improve margins and operations. Analysts also raised the price target to $160 from $115.

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This post was written by Angel Smith

Video transcript

Another trending ticket we're watching here, shares of Kimberly Clark rising this morning after Bank of America upgraded the stock from under performed by under performed to buy from Bank of America there.

The bank saying the company is on the precipice of structural changes and analyst, they're also raising their price target on the name to 160 from 115 here.

Now it's interesting to note as well.

Taking a look at some of the details within here.

They say that the company is taking steps to improve gross margins including reducing gross, they've got additional savings and also supply chain improvements, which is a critical thing as we kind of get to the point where the kind of post pandemic normalization or return to normal, whatever that looks like starts to really need to be proven out in some of these earnings print.

It looks like they're getting the evidence of that.

Um The analysts also citing opportunities to expand market share through additional innovation and seen expansion through multiple types of businesses as the company starts to improve.

Moving forward that price target increase implying an 18% move to the upside for this name.

Exactly what you were just saying there, expanding market share.

That's actually what stuck out to me within this report because they're talking about doing that through innovation.

They've talked about some of the investments that have been made over the last five years and at least from Bank of America's perspective, they're expecting some of those investments to really start to pay off as the company has been working to quote unquote elevate strategy across a portfolio that has up until this point really helped them drive some of that price mixed gain that has been able to offset the decline that we've seen in volumes almost across the board when it comes to this sector.

Not only it's not just clearly a clark specific problem, but it's something that many of its rivals, many of its competitors within the space has been trying to combat here.

So Bank of America making the case that while they do not expect significant pricing power going forward, they do see some room here to premium as they put it in China remaining a real opportunity here for the company, for investors as you, as we talk about uh gaining market share within uh that region.

And and it is interesting, the last thing I'll say on this to compare it to kind of some of the other earnings prints that we've seen from a name like a dollar tree sticks out to me.

They were talking specifically about headwinds to their paper products, which is what you're gonna be getting with the Kimberly Clark.

It's your Huggies, your K for example.

So it's interesting to see that kind of bifurcation and to what extent that tells you something about the companies that are struggling with this.

Is it a little bit more idiosyncratic to them?