There's been a notable change in appetite for Kimberly-Clark Corporation (NYSE:KMB) shares in the week since its third-quarter report, with the stock down 11% to US$137. Revenues were in line with forecasts, at US$4.7b, although statutory earnings per share came in 14% below what the analysts expected, at US$1.38 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Following the latest results, Kimberly-Clark's twelve analysts are now forecasting revenues of US$19.2b in 2021. This would be a credible 2.1% improvement in sales compared to the last 12 months. Statutory per share are forecast to be US$7.60, approximately in line with the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$19.2b and earnings per share (EPS) of US$7.66 in 2021. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
The analysts reconfirmed their price target of US$156, showing that the business is executing well and in line with expectations. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Kimberly-Clark analyst has a price target of US$187 per share, while the most pessimistic values it at US$120. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Kimberly-Clark shareholders.
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. The analysts are definitely expecting Kimberly-Clark's growth to accelerate, with the forecast 2.1% growth ranking favourably alongside historical growth of 0.2% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 3.4% next year. So it's clear that despite the acceleration in growth, Kimberly-Clark is expected to grow meaningfully slower than the industry average.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Kimberly-Clark's revenues are expected to perform worse than the wider industry. The consensus price target held steady at US$156, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Kimberly-Clark going out to 2024, and you can see them free on our platform here..
And what about risks? Every company has them, and we've spotted 1 warning sign for Kimberly-Clark you should know about.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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