Why Has Kimberly-Clark Stock Remained Flat Since Late 2017?
Kimberly-Clark Corp (NYSE: KMB) stock price has remained roughly unchanged at around $120 since late 2017, primarily due to unfavorable changes in its P/S multiple. However, over this period, the company witnessed a rise in its revenue per share, helped by a rise in revenue and a drop in the outstanding share count. Despite this, the stock has underperformed the S&P, which returned a little under 40% over the same period.
In our interactive dashboard, Why Kimberly-Clark Stock Moved: KMB Stock Has Lost 0% Since 2017, we break down the factors behind this move.
(A) KMB’s Total Revenue has grown 9.7% from $18.3 billion in 2017 to around $20.1 billion on an LTM basis
- KMB’s total revenue has risen gradually from $18.3 billion in 2017 to $19.4 billion in FY 2021, and further to $20.1 billion on an LTM basis.
- Kimberly-Clark produces mostly paper-based consumer products, manufacturing sanitary paper products and surgical & medical instruments.
- The Personal Care segment made up around 53% of the company’s sales as of FY ’21, contributing $10.3 billion to total revenue.
- For additional details about KMB revenues and comparison to peers, see Kimberly-Clark (KMB) Revenue Comparison
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(B) Revenue per share (RPS) increased 15% from $51.87 in 2017 to $59.89 currently
- KMB revenue rose from $18.3 billion in 2017 to $20.1 billion currently, while the outstanding share count decreased from 353.7 million in 2017 to almost 336 million currently.
- Due to this, RPS has risen from $51.87 in FY ’17 to $59.89 currently.
(C) Price-To-Sales (P/S) multiple for Kimberly-Clark rose from 2.2x in 2017 to 2.5x by 2021 end but has pulled back to 2x currently, even lower than its 2017 level
- Despite Kimberly-Clark’s slow sales growth between 2017-end to 2021, its P/S multiple rose from 2.2x in 2017 to 2.5x in late-2021, on the back of rising investor expectations surrounding sanitary and hygiene products.
- However, due to current geopolitical tensions and increased uncertainty in the broader markets, the P/S multiple has pulled back, currently standing at around 2x.
- For additional details about the company’s stock returns and comparison to peers, see Kimberly-Clark (KMB) Stock Return Comparison.
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| Returns | Sep 2022 MTD [1] |
2022 YTD [1] |
2017-22 Total [2] |
| KMB Return | -6% | -16% | 5% |
| S&P 500 Return | -7% | -22% | 65% |
| Trefis Multi-Strategy Portfolio | -11% | -25% | 198% |
[1] Month-to-date and year-to-date as of 9/26/2022
[2] Cumulative total returns since the end of 2016
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