Shares of Kimberly-Clark (KMB) gained over 2% in pre-market trading on Thursday after the company reported better-than-expected 2Q earnings and registered solid year-over-year growth. Further, it lifted organic sales and earnings guidance for 2020.
The company withdrew its guidance and share repurchase program in April amid the concerns related to the COVID-19 pandemic. However, it now expects organic sales to grow by 4%-5% in 2020, which is higher than its earlier guidance of 2% growth issued in January.
Further, it expects adjusted earnings to be $7.40 to $7.60 per share for 2020, which is also higher than its previous outlook of $7.10 to $7.35. Kimberly-Clark said that it expects to repurchase shares worth between $700 million – $900 million this year.
Kimberly-Clark reported adjusted earnings of $2.20 per share, beating the analysts’ expectations of $1.80. Earnings jumped 32% from the year-ago quarter, driven by improved margins aided by significant cost savings.
Revenues of $4.61 billion slightly increased from the year-ago quarter and came ahead of the Street estimates of $4.46 billion. The company also delivered impressive organic sales growth of 4% in the second quarter.
Overall, the Street has a cautiously optimistic outlook on KMB. With 3 Buys, 3 Holds and 1 Sell, the analyst consensus rates KMB a Moderate Buy. The average target price of $150.29 implies a potential upside of 4.2%. (See KMB stock analysis on TipRanks).