# Kimberly-Clark (KMB)

Sector: Household & personal care products

| Field | Value |
|---|---|
| Price | $105.57 |
| Fair value (Analysts) | $131.00 |
| Discount to fair value | 19.4% |
| Fair value uncertainty (Analysts) | High |
| Economic moat (Analysts) | Narrow |
| LSEG analyst rating (1 strong buy to 5 strong sell) | 2.53 |
| Data as of | 2026-10-16 |
| Next earnings | 2026-11-05 (confirmed) |

## In short

The market fears that Kimberly-Clark pays too much for Kenvue while its own sales are weak, and a close by the end of 2026 with a return to sales growth and debt reduction in 2027 can close the gap.

## Themes and gap

- Themes: High debt (leverage), Weak consumer (weak-consumer), New management (management-change)
- Gap type: Can close (closable)
- Why: The final Q3 2026 report on November 5, 2026 and the close of the Kenvue purchase, expected by the end of 2026, give dated tests.

## About

Kimberly-Clark makes personal care and tissue products, which people use every day. Its brands include Huggies, Kleenex, Scott, Kotex, Cottonelle, Poise, Depend and Pull-Ups, and the company says that its brands hold the number one or number two share position in about 70 countries. It sells in more than 175 countries and territories. On July 1, 2026, it put most of its former International Family Care and Professional business into Arbex, a joint venture in which Suzano owns 51% and Kimberly-Clark owns 49%. Kimberly-Clark now reports that business as discontinued operations. In November 2025, it agreed to buy Kenvue, the maker of Tylenol, Listerine and Neutrogena, for shares and cash. When the purchase closes, the company will become a much larger health and wellness company.

## Thesis

The market prices Kimberly-Clark for two concerns. The first is slow growth in its current business. In its preliminary Q3 2026 data, organic sales fell 1.3%, and false social media claims about the quality of its diapers in China lowered sales. The second is the Kenvue purchase. Kimberly-Clark will issue about 280 million new shares and pay about $6.7 billion in cash, which it will fund partly with new debt. Investors fear that the company pays too much, takes on too much debt, and must combine two large companies while its own sales are weak. For the gap to close, three things must be true. The Kenvue purchase must close by the end of 2026, as management expects, after the last foreign regulatory approvals. Organic sales must return to growth as the effect of the China disruption fades. The combined company must show in its first plans that it can cut costs and pay down the new debt. The final Q3 2026 report on November 5, 2026 is the first test, and the close of the purchase and the 2027 outlook in early 2027 are the next tests. If these checks pass, the gap can close over the next four to six quarters. The main reason it may not close is a weak start for the combined company, which would leave Kimberly-Clark with more debt and slow growth.

## Checkpoints

- Nov 5, 2026: Q3 2026 earnings: organic sales. Status: Pending. Watch: Final results that match the preliminary data and an unchanged 2026 outlook pass; a cut to the outlook or a larger fall in organic sales fails.
- Dec 2026 (estimate): Kenvue purchase closes. Status: Pending. Watch: A close by the end of 2026 on the agreed terms passes; a delay into 2027 or new conditions from regulators fail.

## Balance sheet

- Cash: $956M
- Debt: $6.5B
- Net debt: $5.6B
- Interest cover: 13×
- Debt due within 12 months: $43M

At June 30, 2026, debt of continuing operations was $6.52 billion: long-term debt of $6.47 billion and debt payable within one year of $43 million. Cash was $956 million, and the preliminary data shows cash of about $1.87 billion at September 30, 2026. Interest cover is operating profit divided by interest expense for the first half of 2026. Kimberly-Clark has a $4.0 billion revolving credit facility that matures in December 2030 and a $1.0 billion facility that matures in June 2028. For the Kenvue purchase, it has a bridge loan commitment of $7.7 billion, a delayed draw term loan facility, and $4.3 billion of forward-starting interest rate swaps for new fixed-rate debt. The debt will increase much when the purchase closes, because Kimberly-Clark also takes on Kenvue's notes through the exchange offer.

As of 2026-06-30.

Sources:

- https://www.sec.gov/Archives/edgar/data/55785/000162828026052348/kmb-20260630.htm
- https://www.sec.gov/Archives/edgar/data/55785/000110465926115960/tm2627599d1_8k.htm
- https://www.sec.gov/Archives/edgar/data/55785/000110465926115239/tm2627373d1_ex99-1.htm

## Recent events

- 2026-10-15: Kimberly-Clark gave preliminary Q3 2026 data. Net sales were about $4.13 billion, and organic sales fell about 1.3%. Adjusted EPS from continuing operations was about $1.70, up from $1.45 a year earlier. The company said that its 2026 outlook stays the same, and it will report final Q3 results on November 5, 2026.
- 2026-10-13: Kimberly-Clark received the necessary consents from holders of Kenvue notes in its offer to exchange up to $7.0 billion of Kenvue notes for new Kimberly-Clark notes. The company does not expect the exchange to settle before November 2, 2026, and it expects settlement at about the close of the Kenvue purchase.
- 2026-10-01: Kimberly-Clark said that Russell Torres, its President and Chief Operating Officer, will leave the company on November 2, 2026.
- 2026-08-04: Kimberly-Clark reported Q2 2026 results. Net sales from continuing operations were $4.19 billion, up 0.6%, and adjusted EPS from continuing operations was $1.80, up 10.4%. False claims on social media about the quality of its diapers in China lowered sales in the quarter. Management said that the Kenvue purchase was on track to close by the end of 2026.
- 2026-07-01: Kimberly-Clark completed the Arbex joint venture with Suzano. Suzano bought 51% of the former International Family Care and Professional business for about $1.7 billion, and Kimberly-Clark kept 49%.

## Risks

- High: The Kenvue purchase is large. Kimberly-Clark will issue about 280 million new shares and pay about $6.7 billion in cash. If the combined company does not get the cost savings it expects, or if the integration is slow, earnings per share can fall and the new debt can stay high for a long time.
- Medium: The purchase still needs some foreign regulatory approvals. If the close is late, or if regulators ask for changes, costs can increase. Under certain conditions, either company may have to pay the other a termination fee of $1.1 billion.
- Medium: Organic sales fell about 1.3% in Q3 2026, based on preliminary data. False claims about diaper quality in China lowered sales, and the company expects that this disruption lowers its 2026 organic growth by about 1 percentage point.
- Low: The President and Chief Operating Officer leaves on November 2, 2026, close to the planned time of the Kenvue close. A change in senior management during a large integration can slow decisions.

## Links

- Page: https://picks.kamadorueda.com/company/KMB/
- History of changes: https://picks.kamadorueda.com/company/KMB/history/
- JSON with full history: https://picks.kamadorueda.com/data/company/KMB.json

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