Bank of America reported on Monday that it has lowered its rating on personal care product manufacturer, Kimberly Clark Corp (KMB).
The firm has downgraded KMB from a “Buy” to “Neutral,” but has increased the company’s price target from $106 to $108. This price target suggests a 2.5% upside from the stock’s current price of $105.22.
Analyst Christopher Ferrara commented, “we remain bullish on growth prospects, but are maintaining valuation discipline despite this staples-led rally (we downgraded CL (A-2-7, $119.72) and MO (B-2-7, $35.02) to Neutral seven weeks ago). We have recommended KMB over the past 6m despite rising absolute valuation, on the view that valuation vs. peers had not closed enough to adequately reflect (1) improved underlying growth prospects vs. peers, and (2) better commitment to investment behind market expansion, innovation, and strategic marketing. This valuation view is harder to support, as the stock approaches our previous price objective. Based on 2013 P/Es, KMB’s valuation gap with core staples stocks has now improved by 11pts over the 10yr avg (2% premium vs. 9% hist discount). KMB is trading at a 29% premium to the S&P vs to the 10y avg of a 1% premium.”
Kimberly Clark shares were down -$1.13, or -1.07% during Monday morning trading. The stock has increased 37% in the past year.
The Bottom Line
Shares of Kimberly Clark Corp (KMB) have a 3.08% yield, based on Monday morning’s price of $105.10.
Kimberly Clark Corp (KMB) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.