"We believe KMB's gross margin will widen by 280 bp in 2H15 on lower commodity costs and we raise estimates by 25 cents in 2015 and 30 cents in 2016," BMO Capital Markets said.
FX exposure is more manageable than that of the other multinationals, they added.
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Kimberly Clark is a Texas-based manufacturer of a range of products made from natural or synthetic fibers for use in four segments including personal care, consumer tissue, K-C Professional and health care.
Shares of Kimberly Clark closed up 0.53% to $116.45 yesterday.
Separately, TheStreet Ratings team rates KIMBERLY-CLARK CORP as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:
"We rate KIMBERLY-CLARK CORP (KMB) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, reasonable valuation levels, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- KMB's revenue growth has slightly outpaced the industry average of 1.3%. Since the same quarter one year prior, revenues slightly increased by 3.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- KIMBERLY-CLARK CORP has improved earnings per share by 5.6% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, KIMBERLY-CLARK CORP increased its bottom line by earning $5.54 versus $4.42 in the prior year. This year, the market expects an improvement in earnings ($5.55 versus $5.54).
- The net income growth from the same quarter one year ago has significantly exceeded that of the Household Products industry average, but is less than that of the S&P 500. The net income increased by 2.9% when compared to the same quarter one year prior, going from $546.00 million to $562.00 million.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. When compared to other companies in the Household Products industry and the overall market, KIMBERLY-CLARK CORP's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
- You can view the full analysis from the report here: KMB Ratings Report