KMB – Market expectations are for Uniform ROA to remain stable, but management may have concerns about their personal care business, tissue demand, and market share

• Kimberly-Clark Corporation (KMB:USA) currently trades near recent averages relative to UAFRS-based (Uniform) earnings, with a 23.7x Uniform P/E. At these levels, the market is pricing in expectations for Uniform ROA to remain stable, but management may have concerns about their personal care business, tissue demand, and their online channel market share
• Specifically, management may lack confidence in their ability to further gain market share for Kleenex and across online channels, sustain strong momentum for their personal care business, and improve the efficiency of their advertising and supply chain through recent investments. Furthermore, they may have concerns about the sustainability of tissue demand, consistent declines in birth rates across markets, and the sustainability of consumer stockpiling behavior. Finally, they may lack confidence in their ability to sustain volume growth in Africa, and they may have concerns about the continued impact of the pandemic on their business