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Kimberly-Clark (KMB) to Report Q4 Earnings: What's in the Offing?

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Zacks Equity Research
·4 min read
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Kimberly-Clark Corporation KMB is likely to report growth in the top line when it reports fourth-quarter 2020 numbers on Jan 25. The Zacks Consensus Estimate for revenues is pegged at $4.7 billion, which suggests a rise of 3.3% from the figure reported in the prior-year quarter. For 2020, the consensus mark stands at $19.1 billion.

The Zacks Consensus Estimate for the bottom line has risen by a cent in the past 30 days to $1.61 per share, which however indicates a decrease of 5.9% from the year-ago quarter’s reported figure. While Kimberly-Clark’s bottom line underperformed the Zacks Consensus Estimate by 2.8% in the last reported quarter, it has a trailing four-quarter earnings surprise of 6.3%, on average. For 2020, the consensus mark for earnings is currently pegged at $7.67 per share, which suggests growth of 11.3% from the year-ago reported figure.

KimberlyClark Corporation Price, Consensus and EPS Surprise

KimberlyClark Corporation Price, Consensus and EPS Surprise
KimberlyClark Corporation Price, Consensus and EPS Surprise

KimberlyClark Corporation price-consensus-eps-surprise-chart | KimberlyClark Corporation Quote

Key Factors to Note

The company has been benefiting from higher demand amid the pandemic-led stockpiling of essential items. The company’s Personal Care and Consumer Tissue segments are particularly gaining on such trends. However, the K-C Professional segment has been witnessing soft volumes due to coronavirus-induced hurdles. Apart from this, volatile currency movements and any rise in marketing, research and general expenses pose threats to Kimberly-Clark’s performance.

That being said, the company’s commitment to reduce costs through its 2018 Global Restructuring Program as well as Focus on Reducing Costs Everywhere or the FORCE Program has been yielding results. Additionally, focus on three key strategic growth pillars bodes well. These include improving its core business in the developed markets, speeding up growth in the Personal Care segment in developing and emerging markets and enhancing digital and e-commerce capacities.

For 2020, management expects net sales growth of 2-3%. Further, Kimberly-Clark projects organic sales improvement of 5% and 2020 adjusted EPS in the range of $7.50-$7.65, which indicates an increase from $6.89 reported in 2019.

What the Zacks Model Unveils

Our proven model predicts an earnings beat for Kimberly-Clark this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Kimberly-Clark currently has a Zacks Rank #3 and an Earnings ESP of +4.48%.

Other Stocks With Favorable Combinations

Here are some other companies you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this season.

Newell Brands NWL has an Earnings ESP of +2.70% and a Zacks Rank #1, currently. You can see the complete list of today’s Zacks #1 Rank stocks here.

Monster Beverage MNST has an Earnings ESP of +21.81% and a Zacks Rank #2, at present.

Estee Lauder EL currently has an Earnings ESP of +0.55% and a Zacks Rank #3.

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KimberlyClark Corporation (KMB) : Free Stock Analysis Report
 
Newell Brands Inc. (NWL) : Free Stock Analysis Report
 
The Estee Lauder Companies Inc. (EL) : Free Stock Analysis Report
 
Monster Beverage Corporation (MNST) : Free Stock Analysis Report
 
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