3/17/2010- Bank of America Merrill Lynch is lowering their price target for Kimberly-Clark Corp. (NYSE:KMB) to $70, down from $75, and lowering 2010 and 2011 EPS estimates on higher pulp costs.
The bank now sees fiscal 2010 EPS of $4.80, down from $5.10, vs. consensus estimates of $4.89, and fiscal 2011 EPS of $5.23, down from $5.56, vs. consensus estimates of $5.28.
Analyst Christopher Ferrara said, "With 2010 pulp forecasts now running ~$50- 150m higher than KMB's planning assumptions and the euro and UK pound both down ~3% YTD, cost pressure is almost certain to be worse than KMB's current $300-400m est. YTD, KMB (-6%) has underperformed HPC by ~12pts, in large part due to pulp's relentless run (+60% y/y). In our view, KMB is a solid large-cap value play with a number of under-appreciated attributes, like a higher y/y ad ratio, accelerated innovation, working capital progress, strong cash flow and share buybacks. Expecting relatively uneventful analyst day."
Keywords: kimberly-clark bank of america merrill lynch
Ticker(s): KMB
