Kimberly-Clark downgraded because its buy recommendation ‘has not been successful’
Kimberly-Clark Corp. KMB, +0.81% was downgraded to neutral at Goldman Sachs after analysts determined that its buy stock recommendation "has not been successful." The 12-month price target was lowered $1 to $119. "Our fundamental thesis – personal care organic sales momentum could sustain and pulp cost pressure was poised to abate – proved flawed," the note said. Eucalyptus pulp prices have gone up 36% and personal care organic sales growth has slowed. "We effectively top-ticked Kimberly-Clark’s personal care organic sales performance and did not anticipate the competitive pressure that built from P&G in the U.S., a proliferation of challenger brands in China and value offerings in Brazil," the note said. Though costs should level off, the personal care space is still "challenging" with lower birth rates in the U.S. hurting the diaper business, and business in China decelerating in brick-and-mortar channels. Kimberly-Clark shares are down 5.1% for 2018 so far while the S&P 500 index SPX, -0.51% is up 7.2% for the period.
Have breaking news sent to your inbox. Subscribe to MarketWatch's free Bulletin emails. Sign up here.
Source: Read Full Article