Kimberly-Clark shares rose on Thursday after the Huggies parent reported better-than-feared third-quarter results, showcasing the defensive characteristics that attracted us to the stock in the first place. Revenue in the third quarter dipped 0.4% year over year to $4.13 billion, in-line with the LSEG consensus of $4.13 billion. Adjusted earnings per share (EPS) fell 7% from a year ago to $1.70, exceeding analyst expectations of $1.66, according to LSEG data. KMB YTD mountain Kimberly-Clark YTD Shares of Kimberly Clark were up about 1.5% on Thursday as investors gravitated toward defensive stocks and dumped AI data center names. We started a position in the parent company of Cottonelle, Huggies, and Kleenex brands in early September to shift some of our portfolio's exposure away from the AI buildout. Though things got off to a rocky start, the stock has been a ballast since early October, when the tech-heavy Nasdaq topped out. With a 5% sell-off Thursday, the Nasdaq sank into correction territory, meaning it's down over 10% from a recent high. Bottom line We're reiterating our buy-equivalent 1 rating on Kimberly-Clark and…
Here's where we stand on Kimberly-Clark shares after a better-than-feared quarter
In short
The maker of Huggies and Kleenex saw third-quarter profit outperform analyst estimates despite enduring a 7% year-over-year earnings decline. Top-line results matched projections, though organic sales faced a 2.7 percentage point drag tied to debunked social media rumors impacting Chinese diaper demand. Having completed its takeover of Kenvue earlier in the week, management is now prioritizing operational upgrades across underperforming skincare and oral care units while leveraging new international networks.
Key points
- The completed acquisition of Kenvue provides valuable geographic expansion pathways acros…: The completed acquisition of Kenvue provides valuable geographic expansion pathways across Europe and India.
- Shares drew investor interest as a defensive asset while a broad tech sell-off pushed the…: Shares drew investor interest as a defensive asset while a broad tech sell-off pushed the Nasdaq into correction territory.
- Management acknowledged that Kenvue oral care and skin care lines require targeted market…: Management acknowledged that Kenvue oral care and skin care lines require targeted marketing and operational improvements.