KMB
KMB
Accumulate 2026-03-08
Model
DDM
Price at Report
$104.58
Base IV
$108.00
Bear IV
$91.89
Bull IV
$131.21
Entry Zone: 90-105 · Sell Above: 135
Bore Family Office
Valuation Report — Kimberly-Clark Corporation (KMB) • March 8, 2026
3-Stage DDM (Ke) • Discount Rate: 7.50% • Current Price: $104.58
Prepared by Lurch • Bore Family Office • Data: Finnhub, StockAnalysis.com, S&P Global Market Intelligence
🏢 Business Overview
Kimberly-Clark, founded in 1872, is a global consumer staples leader in tissue, personal care, and professional products. Its brands — Huggies, Kleenex, Scott, Cottonelle, Depend, Pull-Ups, and Kotex — are household names in 175+ countries. KMB is a Dividend King with 52 consecutive years of increases. The company is executing "Powering Care," a major restructuring program targeting $3B in gross savings over 2023–2027, including supply chain optimization and manufacturing consolidation. Revenue declined ~15% in FY2023 due to the spin-off of the K-C Professional segment (now KCWW). FY2025 saw further organic revenue pressure from volume softness in developed markets. Net debt of $6.5B is significant (2.1× EBITDA) but manageable given highly predictable cash flows.| Business Segment | Revenue | % of Total | YoY Growth | Notes |
|---|---|---|---|---|
| North America Consumer | $8,500M | 52% | -1.0% | Huggies, Kleenex, Scott, Cottonelle |
| International (Developed) | $3,300M | 20% | -2.5% | FX headwinds; Western Europe + Australia |
| International (Developing) | $4,600M | 28% | +4.0% | Fastest growth — LatAm, Asia, Middle East |
📊 Financial Snapshot
| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
| Revenue ($M) | $19,440 | $20,175 | $17,146 | $16,805 | $16,447 |
| EBITDA ($M) | $3,327 | $3,435 | $2,681 | $3,481 | $3,156 |
| Operating Income ($M) | $2,561 | $2,681 | $1,928 | $2,700 | $2,351 |
| Net Income ($M) | $1,814 | $1,934 | $1,764 | $2,545 | $2,021 |
| EPS (diluted) | $5.35 | $5.72 | $5.21 | $7.55 | $6.07 |
| Free Cash Flow ($M) | $1,723 | $1,857 | $2,776 | $2,513 | $1,639 |
| Annual DPS | $4.560 | $4.640 | $4.720 | $4.880 | $5.040 |
| Total Debt ($M) | $8,574 | $8,422 | $7,984 | $7,418 | $7,168 |
| Rev YoY Growth | — | +3.8% | -15.0% | -2.0% | -2.1% |
📈 DDM Scenarios
$92
🔴 Bear
$108
📊 Base
$131
🚀 Bull
$104.58
Current Price
$125
Analyst Avg PT
📋 Full 10-Year Projection Tables
Bear Scenario
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $5.141 | $4.782 | $4.78 |
| Year 2 | Stage 1 | $5.244 | $4.537 | $9.32 |
| Year 3 | Stage 1 | $5.348 | $4.305 | $13.62 |
| Year 4 | Stage 1 | $5.455 | $4.085 | $17.71 |
| Year 5 | Stage 1 | $5.565 | $3.876 | $21.59 |
| Year 6 | Stage 2 | $5.648 | $3.660 | $25.25 |
| Year 7 | Stage 2 | $5.733 | $3.455 | $28.70 |
| Year 8 | Stage 2 | $5.819 | $3.263 | $31.96 |
| Year 9 | Stage 2 | $5.906 | $3.080 | $35.04 |
| Year 10 | Stage 2 | $5.995 | $2.909 | $37.95 |
| Terminal | — | TV=$111.17 | PV(TV)=$53.94 (59% of IV) |
Base Scenario
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $5.216 | $4.852 | $4.85 |
| Year 2 | Stage 1 | $5.399 | $4.672 | $9.52 |
| Year 3 | Stage 1 | $5.588 | $4.498 | $14.02 |
| Year 4 | Stage 1 | $5.784 | $4.331 | $18.35 |
| Year 5 | Stage 1 | $5.986 | $4.170 | $22.52 |
| Year 6 | Stage 2 | $6.136 | $3.976 | $26.50 |
| Year 7 | Stage 2 | $6.289 | $3.791 | $30.29 |
| Year 8 | Stage 2 | $6.446 | $3.614 | $33.90 |
| Year 9 | Stage 2 | $6.607 | $3.446 | $37.35 |
| Year 10 | Stage 2 | $6.773 | $3.286 | $40.64 |
| Terminal | — | TV=$138.84 | PV(TV)=$67.36 (62% of IV) |
Bull Scenario
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $5.317 | $4.946 | $4.95 |
| Year 2 | Stage 1 | $5.610 | $4.854 | $9.80 |
| Year 3 | Stage 1 | $5.918 | $4.764 | $14.56 |
| Year 4 | Stage 1 | $6.244 | $4.675 | $19.24 |
| Year 5 | Stage 1 | $6.587 | $4.588 | $23.83 |
| Year 6 | Stage 2 | $6.818 | $4.418 | $28.25 |
| Year 7 | Stage 2 | $7.056 | $4.253 | $32.50 |
| Year 8 | Stage 2 | $7.303 | $4.095 | $36.59 |
| Year 9 | Stage 2 | $7.559 | $3.943 | $40.54 |
| Year 10 | Stage 2 | $7.823 | $3.796 | $44.33 |
| Terminal | — | TV=$179.07 | PV(TV)=$86.88 (66% of IV) |
🔲 Sensitivity Table
| Ke \ gT | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 5.5% | $145 | $160 | $180 | $208 | $250 |
| 6.0% | $129 | $140 | $154 | $174 | $200 |
| 6.5% | $116 | $124 | $135 | $149 | $167 |
| 7.0% | $105 | $112 | $120 | $130 | $143 |
| 7.5% | $96 | $102 | $108 | $116 | $126 |
| 8.0% | $89 | $93 | $98 | $104 | $112 |
| 8.5% | $82 | $86 | $90 | $95 | $101 |
| 9.0% | $77 | $80 | $83 | $87 | $92 |
| 9.5% | $72 | $74 | $77 | $80 | $84 |
Green = >10% above current price. Red = >10% below. Gold = within ±10%.
📉 Long-Term Price Trend Channel
Log-linear trend fitted to full price history. ±1.5σ bands. Green shaded zone = bottom 25% of historical range — historically attractive entry.
🏦 Comparable Valuation
| Ticker | Company | P/E (fwd) | EV/EBITDA | Div Yield | Div Growth Streak |
|---|---|---|---|---|---|
| KMB | Kimberly-Clark (current) | 13.7x | 12.8x | 4.8% | 52 yrs |
| PG | Procter & Gamble | 22.5x | 17.5x | 2.6% | 68 yrs |
| CL | Colgate-Palmolive | 21.0x | 16.2x | 2.3% | 61 yrs |
| CHD | Church & Dwight | 27.0x | 20.1x | 1.1% | 28 yrs |
| ENR | Energizer Holdings | 9.5x | 8.8x | 4.3% | 5 yrs |
| HRL | Hormel Foods | 16.4x | 10.5x | 4.7% | 59 yrs |
💰 Dividend / Distribution Analysis
| Metric | Value |
|---|---|
| Annual DPS | $5.040 |
| Current Yield | 4.82% |
| Consecutive Growth Years | 52 |
| 1-yr DPS CAGR | +3.3% |
| 3-yr DPS CAGR | +2.3% |
| 5-yr DPS CAGR | +2.4% |
| 10-yr DPS CAGR | +4.0% |
| Payout Ratio (DPS/EPS) | 83.0% ⚠️ |
| FCF Payout Ratio | 102.4% ⚠️ |
| Sustainability Verdict | Moderate Risk (FCF tight FY2025) — Normalizing FY2026 |
FY2025 FCF of $1.64B was unusually low (capex elevated at $808M for Powering Care investments). Normalized FCF is ~$2.2–2.5B (FY2023/24 avg), comfortably covering the ~$1.68B annual dividend. The 29% tax rate anomaly in FY2025 should normalize to ~21% in FY2026, boosting both EPS and FCF. KMB has raised its dividend for 52 consecutive years — management is deeply committed to the streak. The payout vs normalized EPS ($7.66 expected FY2026) is ~66% — sustainable for a consumer staples compounder.
🔮 Analyst Forecast Section
(a) EPS Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| FY2022 | $5.72 | — | — | — | Actual |
| FY2023 | $5.21 | — | — | — | Actual |
| FY2024 | $7.55 | — | — | — | Actual |
| FY2025 | $6.07 | — | — | — | Actual |
| FY2026E | $7.35 | $7.66 | $8.03 | 22 | Estimate |
| FY2027E | $7.25 | $7.76 | $8.40 | 20 | Estimate |
(b) Revenue Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| FY2022 | $20.2B | — | — | — | Actual |
| FY2023 | $17.1B | — | — | — | Actual |
| FY2024 | $16.8B | — | — | — | Actual |
| FY2025 | $16.4B | — | — | — | Actual |
| FY2026E | $16.3B | $17.1B | $19.4B | 22 | Estimate |
| FY2027E | $16.7B | $17.7B | $21.7B | 20 | Estimate |
(c) Individual Analyst Price Targets
Consensus: Avg $124.83 | Range $90–$162
| Analyst | Firm | Rating | PT | Upside |
|---|---|---|---|---|
| Unattributed | Bull Case | Buy | $162 | +54.9% |
| Peter Grom | UBS | Hold | $110 | +5.2% |
| Robert Moskow | TD Cowen | Hold | $105 | +0.4% |
| Chris Carey | Wells Fargo | Hold | $105 | +0.4% |
| Filippo Falorni | Citigroup | Strong Sell | $90 | -13.9% |
(d) Earnings Surprise History
| Quarter | EPS Act vs Est | EPS Beat/Miss | Rev Act vs Est | Rev Beat/Miss | Guidance |
|---|---|---|---|---|---|
| Q2 FY2025 | $1.93 vs $1.93 | +$0.00 ✅ | $4.3B vs $4.2B | +$0.1B ✅ | Maintained |
| Q3 FY2025 | $1.83 vs $1.85 | $-0.02 ❌ | $4.1B vs $4.2B | $-0.0B ❌ | Tightened |
| Q4 FY2025 | $1.50 vs $1.73 | $-0.23 ❌ | $5.0B vs $5.0B | $-0.0B ❌ | FY2026 adj EPS $7.30–$7.55 guided |
(e) Confidence Band Commentary
FY2025 EPS of $6.07 was compressed by a 29.2% effective tax rate (vs normalized ~21%) and restructuring charges under the "Powering Care" transformation. The FY2026 consensus of $7.66 (+26%) implies a tax rate normalization and cost savings flow-through — both plausible. However, the wide PT range ($90–$162) reflects genuine disagreement on whether KMB can reignite volume growth in developed markets against private label pressure. Citi's Strong Sell at $90 argues the stock is still overvalued vs peers given persistent volume erosion. UBS at $110 is more conservative than the $125 consensus and closest to current price.
💡 Investment Thesis
Bull case: At ~$105, KMB trades at a steep 20-30% discount to peers PG and CL on most valuation metrics, while offering a superior dividend yield (4.8% vs PG 2.6%). The Powering Care transformation is underway and should deliver $3B in gross savings by 2027. Developing markets (28% of revenue) are growing at 4%+ organically — the long-term engine. Tax rate normalization alone adds ~$0.85/share in FY2026 EPS. At $7.66 adj EPS and 15-16× forward P/E, fair value is $115–$125. A reversion to peer multiples (20×) implies $150+.
Bear case: Private label share gains are accelerating in tissue and diapers. Huggies faces structural pressure from competitors (P&G Pampers) and retailer brands. Developed market volumes continue to erode, offsetting pricing. EM growth disappoints on FX/political risk. FCF continues to be consumed by restructuring capex through 2027, limiting buybacks and dividend growth. Citi's $90 bear case argues for P/E multiple compression to ~12× on lower earnings.
Key watch: Q1 FY2026 organic volume trends — specifically North America diaper and tissue share data. Any sustained volume recovery rerates the stock sharply.
⚖️ DDM Verdict: Accumulate — Kimberly-Clark Corporation (KMB)
Current price: $104.58 | Analyst Avg PT: $124.83
$92
🔴 Bear
$108
📊 Base
$131
🚀 Bull
| Tier | Price | Action |
|---|---|---|
| Tier 1 — Starter | ≤$105 | Begin position |
| Tier 2 — Add | ≤$98 | Add on weakness |
| Tier 3 — Full | ≤$90 | Full allocation |
| Sell Alert | ≥$135 | Above fair value — consider trimming |
KMB at $104 is trading at a 15-year relative valuation discount vs peer group (PG, CL) — the largest spread in recent history. The dividend at 4.8% is among the highest yields in consumer staples. FY2025 earnings were distorted by a high tax rate and restructuring; normalized FY2026 EPS of $7.66 puts the P/E at just 13.7× — cheap for a Dividend King with 52 years of consecutive increases. The stock is essentially at current price now, making this a starter-position entry with room to add aggressively on any market-driven dip below $100 or toward $90 (Citi bear case). Full position at $90 would yield 5.6% — exceptional for this quality.
Bore Family Office • Analysis generated by Lurch • Not investment advice.