KIMBERLY-CLARK CORPORATION (KMB): what the price requires
At today's price, KIMBERLY-CLARK CORPORATION (KMB) is priced for -4.4% growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/KMB
Headline
| Field | Value |
|---|---|
| Ticker | KMB |
| Company | KIMBERLY-CLARK CORPORATION |
| Current price | $109.85/sh |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin needed | 6.8% |
| Operating margin today | 15.7% |
| Margin compression implied | -8.9pp |
| Implied growth | -4.4% |
| Multiple paid | 17x operating income |
The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration solve.
Solve inputs: computed at a 7% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~7.3pp (computed at the 7% minimum rate; the CAPM rate 6.9% sits below it).
Reconcile: at the x-ray's 9.3% required return this reads ~10.8%/yr; the models below use their own rates.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | -0.24σ |
| cohort percentile (of 76 peers) | 47 |
| implied end-window share | 0% |
Valuation X-Ray
Every valuation family lands below the price. The price therefore requires assumptions beyond what those standard frames encode.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 1.60x | 5 | expensive |
| Earnings | 1.72x | 4 | expensive |
| Relative | 1.47x | 3 | expensive |
| Growth | 2.14x | 4 | expensive |
Families that call it expensive: Asset, Earnings, Growth
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 9.2%); the inversion above states its own rate.
Per-Model Detail (n=16)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $44.77 | 2.45x | yes | FCF base $1.8B, growth -10% (input: historical growth), terminal g 0.5%, WACC 9.2%, 5yr projection |
| DCF Exit Multiple | Growth | $95.71 | 1.15x | yes | Exit EV/EBITDA: 12.5x / 14.5x / 16.5x (bear / base = today's held flat / bull), 5yr |
| Relative Valuation | Relative | $82.24 | 1.34x | yes | P/E 14x (static sector reference · 2026-04), scenarios: 11.9x / 14.0x / 16.1x (bear / base = reference held flat / bull), EV/EBITDA 9.95x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | $57.87 | 1.90x | yes | Stage 1: -6% for 5yr, Stage 2: 3.5% perpetual |
| Simple Excess Return | Asset | $68.75 | 1.60x | yes | BV/sh $5.39, ROE (TTM) 118.0%, ke 9.3% |
| Two-Stage Excess Return | Asset | $637.33 | 0.17x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $46.28 | 2.37x | yes | Rev $16.6B, growth -12% (input: historical growth; tapered), Terminal P/S: 1.9x / 2.2x / 2.5x (bear / base = today's held flat / bull, cap 8x) |
| Growth-Adjusted P/E | Relative | — | — | no | — |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $69.53 | 1.58x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $2.78B × (1−21%) / WACC 9.2% → EPV (no growth) |
| Residual Income | Asset | $116.83 | 0.94x | yes | BV $5.39 + 5yr PV of (ROE (TTM) 118.0% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $27.79 | 3.95x | yes | √(22.5 × EPS $6.37 × BVPS $5.39) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $60.50 | 1.82x | yes | EBITDA $2.53B × sector EV/EBITDA 8.0x |
| FCF Yield | Earnings | $59.40 | 1.85x | yes | FCF $1837.0M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $55.15 | 1.99x | yes | SBC-adj FCF $1.71B (FCF $1.84B − SBC $0.13B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $5.34 | 20.57x | yes | EPS $6.37 × (8.5 + 2×-5.0%) × (4.4 / 5.3%) (excluded from median) |
| ROIC-Justified P/B | Asset | $18.66 | 5.89x | yes | BV $5.39 × (ROIC 31.9% / WACC 9.2%) |
| P/Sales Sector | Relative | $74.53 | 1.47x | yes | Revenue $16.56B × sector P/S 1.5x |
| PEG Fair Value | Relative | — | — | no | — |
| Earnings Yield | Earnings | $68.86 | 1.60x | yes | EPS $6.37 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $6.3b |
| Net debt / NOPAT (after-tax) | 3.09x |
| Net debt / operating income (pre-tax) | 2.44x |
| Interest coverage | 10.2x |
| Share count CAGR (buyback) | -0.4% |
| Burning cash | no |
Bullet Takeaways
At $102.51 the price sits above every standard valuation family for Kimberly-Clark, the asset, earnings-power, peer-multiple, and forward-growth frames all land below it. The stock carries a quality premium the methods do not capture on their own.
The defining event is the Kenvue acquisition, approved by shareholders on January 29, 2026, which folds Tylenol, Listerine, Neutrogena, and Band-Aid into the portfolio and reshapes Kimberly-Clark from a tissue-and-personal-care company into a broader consumer-health business.
Full-year 2025 net sales were $16.4 billion with organic sales up 1.7%, and 2026 guidance calls for organic growth in line with roughly 2% category growth, mid-to-high single-digit adjusted operating profit growth, and double-digit constant-currency adjusted EPS growth.
Bull Case
Valuing a consumer-staples company means accepting that the market pays for predictability, and Kimberly-Clark is built to be predictable. Tissue, diapers, and feminine care are bought in good times and bad, branded under Huggies, Kleenex, Scott, and Kotex, with the kind of repeat-purchase loyalty that lets a company raise prices a little every year and hold margin. That is why staples trade at premiums to their own cash flows: the discount rate the market applies to a recession-resistant earnings stream is genuinely lower. Kimberly-Clark fits the template, and the recent numbers show the engine still works, full-year 2025 organic sales grew 1.7% even as reported net sales of $16.4 billion dipped on currency and divestitures.
The quality underneath the multiple is real. The company throws off close to $1.8 billion of free cash flow, return on invested capital runs above 30%, and the dividend is one of the longest-standing in the market, supported by a payout the cash flow comfortably covers. The 2026 guide is the bull case in management's own words: organic growth in line with roughly 2% category growth, mid-to-high single-digit adjusted operating profit growth, and double-digit adjusted EPS growth on a constant-currency basis. Margin expansion and buybacks are doing the heavy lifting, exactly the playbook a mature staple should run.
The transformational catalyst is Kenvue. On January 29, 2026, shareholders overwhelmingly approved Kimberly-Clark's acquisition of Kenvue, the maker of Tylenol, Listerine, Neutrogena, and Band-Aid. That deal turns a tissue-and-personal-care company into a broader consumer-health platform, adding higher-growth, higher-margin categories and a deeper bench of trusted brands. Management has framed it as a generational value-creation opportunity, and the logic is the staples logic at larger scale: more shelf space, more pricing power, and more cross-category distribution leverage. Against packaging and consumer-products peers like Reynolds, Avery Dennison, and Graphic Packaging, Kimberly-Clark offers stronger brand equity and now a path to faster growth. The premium the market pays is the price of owning that durability through whatever the economy does next.
Bear Case
The moat in consumer staples is the brand premium over the store label, and that premium is being chipped away one shopping trip at a time. Kimberly-Clark says it directly: increased purchases of private label products could reduce net sales of its higher-margin products and negatively impact profitability, in a marketplace where competition keeps intensifying (FY2025 10-K, accession 0001628280-26-007567). Diapers and tissue are exactly the categories where a cash-strapped shopper can switch to the store brand without much sacrifice, and once they switch, the habit can stick. The 1.5% price decline that dragged Q1 2025 organic sales is the visible edge of that erosion: when volume will not grow, the company has to give back price, and giving back price in a branded staple is the moat narrowing in real time.
The defense is expensive and the data shows it. The same filing concedes that to stay competitive it may be necessary to lower prices and increase spending on advertising and promotion, which could adversely affect financial results (FY2025 10-K). That is the treadmill: hold share by spending more, and watch margin pay for it. Peers describe the same pressure from the retailers in the middle, large customers with power over suppliers, demanding innovation while requiring suppliers to maintain or reduce prices and shorten lead times (REYN FY2025 10-K, accession 0001628280-26-005284). Kimberly-Clark sits on the wrong side of that bargaining table for its commodity-adjacent categories.
Then there is the price and the balance sheet. Every standard valuation family lands below the current quote, asset, earnings power, peers, and forward growth all say the stock is rich, so the buyer is paying a full premium for a business growing organic sales around 2%. The Kenvue acquisition, the supposed growth answer, adds integration risk and likely leverage on top of existing net debt near $6.3 billion, and large consumer-health deals have a long history of underwhelming. Input costs are the other live exposure: as a manufacturer Kimberly-Clark depends on pulp, resin, and energy whose prices fluctuate, the same raw-material sensitivity peers flag as a core business risk (AVY FY2025 10-K, accession 0000008818-26-000015). A premium multiple on a slow-growth staple facing private-label pressure, integration risk, and input-cost volatility is a lot to underwrite at this price.
Valuation
Kimberly-Clark is the unusual staple where no valuation family reaches the current price. The asset, earnings-power, peer-multiple, and even forward-growth frames all land below $102.51 (June 27, 2026), which the engine characterizes plainly: the price is a bet beyond what any standard frame supports. The cash-flow methods that capitalize current earnings, FCF yield near $59, earnings power value near $65 on a normalized five-year EBIT, the DCF perpetual-growth method near $61, all cluster in the $55 to $65 range. The relative methods on peer multiples reach the low-to-mid $80s. Only the asset methods that lever an enormous trailing return on equity produce outlier highs, and those are artifacts of a tiny book value per share of $5.39 against buybacks, not durable value anchors.
The reverse-DCF tells a more nuanced story. Read against the company's operating income, the market is paying about 16x company-wide operating income, which on its own sits below what even a steady 5% annual decline in operating profit would warrant, in the lower half of the peer multiple range. That is the bull's counterpoint: on an operating-multiple basis the price is not absurd for a stable cash generator. The internal fair-value range, which incorporates a quality and durability premium, spans $157.76 to $215.75 with a base near $174, well above the price.
The synthesis is a genuine tension. The bottom-up valuation methods say the stock is rich on current cash flow; the operating-multiple inversion and the quality-adjusted range say the durability is worth paying for. Both can be true: a recession-resistant staple deserves a premium to its mechanical cash-flow value, and the question is only how large. With net debt near $6.3 billion before the Kenvue deal adds more, the balance sheet limits the margin for error, and the burden falls on the Kenvue acquisition to convert the premium into the faster growth that justifies it.
Catalysts
The dominant catalyst is the Kenvue acquisition, approved by Kimberly-Clark shareholders on January 29, 2026. The deal adds Tylenol, Listerine, Neutrogena, and Band-Aid to the portfolio and reshapes the company into a broader consumer-health platform. Every milestone on closing, financing terms, leverage, and early integration progress will move the stock, and the synergy and growth case management laid out is the central thing to verify over the coming quarters.
The operating story runs underneath. Full-year 2025 net sales were $16.4 billion, down 2.1% on reported terms but up 1.7% organically, with the Powering Care transformation cited as the margin and execution engine. For 2026 management guides to organic growth in line with roughly 2% category growth, mid-to-high single-digit adjusted operating profit growth, and double-digit constant-currency adjusted EPS growth. The next quarterly prints test whether volume can carry growth without further price giveback.
The recurring swing factors are pricing versus private label, input costs, and the dividend. Watch organic sales mix between price and volume, since price declines signal moat pressure, alongside pulp, resin, and energy costs that drive gross margin, and currency, which weighed on reported sales in 2025. Capital return continuity through the Kenvue integration is the other signal to track over the next 90 days.
Sources: StockTitan (KMB FY2025 results and Kenvue CAGNY plan), Yahoo Finance (Kenvue narrative), Seeking Alpha, SEC 8-K earnings releases.
Peer Cohorts (Per Segment, With Filing Citations)
North America (NA) (reported)
- PG (PROCTER & GAMBLE CO)
- (no filing in the citation store)
- CL (COLGATE-PALMOLIVE COMPANY)
- (no filing in the citation store)
- KVUE (Kenvue Inc.)
- (no filing in the citation store)
- CHD (CHURCH & DWIGHT CO., INC.)
- (no filing in the citation store)
- CLX (CLOROX CO /DE/)
- (no filing in the citation store)
International Personal Care (IPC) (reported)
- PG (PROCTER & GAMBLE CO)
- (no filing in the citation store)
- CL (COLGATE-PALMOLIVE COMPANY)
- (no filing in the citation store)
- UL (UNILEVER PLC)
- (no filing in the citation store)
- KVUE (Kenvue Inc.)
- (no filing in the citation store)
- CHD (CHURCH & DWIGHT CO., INC.)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.