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Kimberly-Clark Q3 Earnings: Can NYSE:KMB Hit Its $1.73 EPS Target?

in EARNINGS/INVESTING IDEAS by

Kimberly-Clark Corporation (NYSE:KMB) is scheduled to report Q3 earnings results on October 22, 2020.

The company is expected to report earnings of $1.73/share on revenue of $4.594 billion. The consensus earnings per share (EPS) of $1.73/share is based on a poll of 12 analysts and represents a decline in eps of −5.7% over the same quarter last year, when the company reported earnings of $1.84/share.

The revenue forecast of $4.594 billion based on a poll of 7 analysts implies a year-over-year (YoY) decline in revenue of −1.0%. Last year the company reported $4.64 billion in revenue for the quarter.

Expected to report EPS contraction of −5.7% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $4,593.53 $4,640.00 −1.0%
EPS $1.73 $1.84 −5.7%

Earnings Call Trends

Historically, management has exceeded analyst expectations 7 out of the last 8 tracked quarters, and missed expectations 1 quarters.

What are your expectations from Kimberly-Clark Corporation for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $1.77 $2.20 24.1% Beat
Q1, 2020 $1.96 $2.13 8.7% Beat
Q4, 2019 $1.70 $1.71 0.5% Beat
Q3, 2019 $1.79 $1.84 2.5% Beat
Q2, 2019 $1.62 $1.67 3.2% Beat
Q1, 2019 $1.55 $1.66 7.2% Beat
Q4, 2018 $1.66 $1.60 −3.4% Missed
Q3, 2018 $1.63 $1.71 4.9% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by increasing 2.1%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 23, 2020 $144.30 $147.34 2.1% Increase
April 22, 2020 $139.47 $140.36 0.6% Increase
January 23, 2020 $144.39 $143.42 −0.7% Decline
October 22, 2019 $139.19 $134.29 −3.5% Decline

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −3.05, the model suggests that the company is not likely to be an earnings manipulator. A value of −3.05 implies a 0.1% chance of earnings manipulation.

Fundamentals And Technical Analysis

Kimberly-Clark Corporation is currently trading at $150.81/share, down −1.6% for the day. The company is trading at approximately 94.2% of its 52-week high of $160.16/share. The company’s stock price is up 2.4% since the last earnings report and down −2.2% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 48.48 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:KMB Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 20.10 and a forward P/E multiple of 20.02.

Kimberly-Clark Corporation’s current share price also implies a price-to-book (P/B) multiple of 191.92. The following table summarizes some other key fundamental ratios:

Data as of October 20, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $150.81
P/E Ratio 20.1x
P/E Ratio (Fwd) 20.0x
PEG Ratio 0.5
Total Debt / Total Capital 13.4%
Levered Free Cash Flow $2.817 billion
EV / EBITDA 13.4x

Finbox

Kimberly-Clark Corporation is a large-cap stock with a market capitalization of $51.433 billion and a total enterprise value of $58.314 billion. The company operates in the Consumer Staples sector and the Household Products industry.

Kimberly-Clark Corporation, together with its subsidiaries, manufactures and markets personal care and consumer tissue products worldwide. It operates through three segments: Personal Care, Consumer Tissue, and K-C Professional. The Personal Care segment offers disposable diapers, training and youth pants, swimpants, baby wipes, feminine and incontinence care products, and other related products under the Huggies, Pull-Ups, Little Swimmers, GoodNites, DryNites, Kotex, U by Kotex, Intimus, Depend, Plenitud, Poise, and other brand names. The Consumer Tissue segment provides facial and bathroom tissues, paper towels, napkins, and related products under the Kleenex, Scott, Cottonelle, Viva, Andrex, Scottex, Neve, and other brand names. The K-C Professional segment offers wipers, tissues, towels, apparel, soaps, and sanitizers under the Kleenex, Scott, WypAll, Kimtech, and KleenGuard brands. The company sells household use products directly to supermarkets, mass merchandisers, drugstores, warehouse clubs, variety and department stores, and other retail outlets, as well as through other distributors and e-commerce; and away-from-home use products directly to manufacturing, lodging, office building, food service, and public facilities, as well as through distributors. Kimberly-Clark Corporation was founded in 1872 and is headquartered in Dallas, Texas.

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