Kimberly-Clark Corporation Just Released Its Annual Results And Analysts Are Updating Their Estimates
The yearly results for Kimberly-Clark Corporation (NYSE:KMB) were released last week, making it a good time to revisit its performance. Kimberly-Clark reported US$18b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$6.24 beat expectations, being 2.1% higher than what analysts expected. Earnings are an important time for investors, as they can track a company's performance, look at what top analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what analysts' statutory forecasts suggest is in store for next year.
View our latest analysis for Kimberly-Clark
Taking into account the latest results, Kimberly-Clark's 13 analysts currently expect revenues in 2020 to be US$18.7b, approximately in line with the last 12 months. Statutory earnings per share are expected to increase 9.4% to US$6.87. Before this earnings report, analysts had been forecasting revenues of US$18.7b and earnings per share (EPS) of US$6.90 in 2020. So it's pretty clear that, although analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
Analysts reconfirmed their price target of US$143, showing that the business is executing well and in line with expectations. The consensus price target just an average of individual analyst targets, so - considering that the price target changed, it would be handy to see how wide the range of underlying estimates is. The most optimistic Kimberly-Clark analyst has a price target of US$160 per share, while the most pessimistic values it at US$118. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that analysts have a clear view on its prospects.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. From these estimates it looks as though analysts expect the years of declining sales to come to an end, given the flat revenue forecast for next year. That would be a definite improvement, given that the past five years have seen sales shrink five years annually. Compare this against analyst estimates for the wider market, which suggest that (in aggregate) market revenues are expected to grow 3.6% next year. So it's pretty clear that, although revenues are improving, Kimberly-Clark is still expected to grow slower than the market.
The Bottom Line
The most obvious conclusion from these results is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although analyst forecasts imply revenues will perform worse than the wider market. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that in mind, we wouldn't be too quick to come to a conclusion on Kimberly-Clark. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Kimberly-Clark analysts - going out to 2024, and you can see them free on our platform here.
It might also be worth considering whether Kimberly-Clark's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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