Kimberly-Clark Up 7% in a Month: Is the Stock Still a Good Buy?

Kimberly-Clark Corporation’s KMB shares have gained 6.6% in the past month, outpacing the industry and the S&P 500's growth of 0.2% and 1.8%, respectively. The company has outperformed the Consumer Staples sector which posted growth of 2.7%. This growth indicates Kimberly-Clark's ongoing commitment to innovation, operational efficiency and expanding its premium product offerings to meet the evolving demands for health, hygiene and sustainability.KMB Stock Past Month PerformanceImage Source: Zacks Investment ResearchThe stock last traded at $135.64, maintaining strong upward momentum and price stability, with its current price above 50-day simple moving averages of $130.42. Let us analyze the fundamentals of Kimberly-Clark to understand the key drivers behind its market position and financial resilience.Decoding KMB’s StrategiesKimberly-Clark's Powering Care Strategy drives growth, efficiency and organizational alignment. The strategy focuses on three core areas, accelerating innovation, optimizing margins and restructuring for sustainable growth. The company invests in high-growth segments and cutting-edge innovations to enhance productivity. These efforts are designed to strengthen its global leadership position.Innovation is a central focus of Kimberly-Clark’s Powering Care strategy, with it launching new products across all price tiers. By offering unique, higher-value products, Kimberly-Clark aims to drive premiumization and meet evolving consumer demands, strengthening its brand. This strategy is designed to boost consumer loyalty and drive top-line growth in key categories.Kimberly-Clark achieved significant market share growth across several key regions in 2024, reinforcing its competitive positioning globally. In North America, the company saw an 80-basis point increase in its weighted market share within personal care categories. In China, Huggies gained 200 basis points, while Andrex and Kleenex saw increases in the United Kingdom. South Korea saw a 400-basis point gain in diapers and strong growth in feminine care was achieved in Australia and Indonesia. These gains highlight Kimberly-Clark's effective strategy, driven by superior products across the good-better-best price tiers and successful commercial strategies that have strengthened its brand and fostered consumer loyalty.KMB Stock ValuationDespite this uptick in the stock price, Kimberly-Clark is currently trading at a discount to its historical and industry benchmarks. KMB’s forward 12-month price-to-earnings multiple is 17.95X, below its median level of 18.5X in the past year and lower than the industry’s multiple of 21.25X. This implies that, relative to its earnings potential, the KMB stock might still be undervalued.Image Source: Zacks Investment ResearchWhat May Pull Back Kimberly-Clark’s Momentum?Kimberly-Clark has been battling a dynamic consumer and retail environment, which is putting pressure on its performance. On its fourth-quarter 2024 earnings call, management highlighted that the demand has softened in North America’s professional segment, while in emerging markets, like Southeast Asia and Latin America, economic pressures have led to reduced consumer purchasing frequency, particularly in markets with informal economies.Kimberly-Clark’s extensive global presence makes it highly susceptible to foreign currency volatility. A stronger U.S. dollar pressures margins, especially when the company is unable to raise prices and pass the impact on to its customers. Currency headwinds have already affected performance, with the fourth quarter of 2024 revenues declining 0.8% year over year to $4.93 billion. Unfavorable foreign exchange rates reduced sales by approximately 1.7%, while the divestiture of the Personal Protective Equipment business contributed to an additional 1.4% decline. Looking ahead to 2025, the company expects net sales to be adversely impacted by nearly 300 basis points, due to unfavorable currency rates. Operating profit growth is also anticipated to face a 300-basis-point drag from currency fluctuations. Additionally, EPS is expected to reflect an adverse impact of 350-400 basis points from currency translation, including the effect on income from equity interests.KMB’s Consensus Estimates Showing DowntrendReflecting the negative sentiment around KMB, the Zacks Consensus Estimate for the current quarter and fiscal 2025 has seen downward revisions. In the past 30 days, analysts have lowered estimates for the current quarter by 2.5% to $1.92 and for the current fiscal by 0.7% to $7.51 per share.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.Image Source: Zacks Investment ResearchKimberly-Clark Stock AnalysisKimberly-Clark stock has demonstrated solid performance, driven by its strategic focus on innovation and operational efficiency. The company's Powering Care strategy, which emphasizes product premiumization and market expansion, has strengthened its competitive position globally. Despite strong growth in several key regions, challenges like foreign currency volatility and softening demand in some markets could dampen near-term momentum. While the stock appears undervalued relative to its earnings potential, cautious investors may prefer to wait for more favorable conditions before entering. Current investors may benefit from holding their positions. Kimberly-Clark presently carries a Zacks Rank #3 (Hold).Stocks to ConsiderOllie's Bargain Outlet Holdings, Inc. OLLI operates as a retailer of brand-name merchandise in the United States and currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.The Zacks Consensus Estimate for Ollie's Bargain’s current fiscal-year sales and earnings implies growth of 8.3% and 13.1%, respectively, from the year-ago reported numbers. OLLI delivered an earnings surprise of 5% in the trailing four quarters, on average.Ulta Beauty, Inc. ULTA operates as a specialty beauty retailer in the United States. It currently holds a Zacks Rank #2. ULTA delivered a trailing four-quarter earnings surprise of 6.2%, on average.The Zacks Consensus Estimate for Ulta Beauty’s current fiscal-year sales indicates growth of 0.6% from the year-ago reported numbers. Arhaus, Inc. ARHS operates as a lifestyle brand and premium retailer in the home furnishings market in the United States. It carries a Zacks Rank #2 at present. ARHS delivered a trailing four-quarter earnings surprise of 124.5%, on average.  The Zacks Consensus Estimate for Arhaus’ current-quarter sales indicates growth of 2% from the year-ago reported numbers.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Kimberly-Clark Corporation (KMB): Free Stock Analysis Report Ulta Beauty Inc. (ULTA): Free Stock Analysis Report Ollie's Bargain Outlet Holdings, Inc. (OLLI): Free Stock Analysis Report Arhaus, Inc. (ARHS): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks