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Investing.com - TD Cowen has reduced its price target on Kimberly Clark (NASDAQ:KMB) to $112.00 from $130.00 while maintaining a Hold rating following the company’s announcement of its Kenvue acquisition. The new target sits above KMB’s current price of $102.27, with the stock now trading near its 52-week low of $102.20. According to InvestingPro data, the stock appears undervalued based on its Fair Value assessment.
The firm noted that KMB stock fell 14% on the acquisition news but suggested the shares may not be fully de-risked despite this significant drop. TD Cowen cited "significant unknowns" related to Tylenol and UK talc litigation as ongoing concerns for investors. This decline is part of a broader negative trend, with KMB’s total return over the past week reaching -15.24%, though the stock’s 4.93% dividend yield may provide some comfort to income-focused investors.
The research firm also expressed caution about the "difficult work ahead to stabilize the declining Kenvue business" as a factor in its more conservative valuation of Kimberly Clark shares.
TD Cowen further highlighted concerns about "the complexity of the combined enterprise" as an additional challenge facing Kimberly Clark following the acquisition.
The price target reduction represents approximately a 14% decrease from the previous $130.00 target, aligning with the stock’s initial market reaction to the acquisition announcement.
In other recent news, Kimberly-Clark has reported better-than-expected earnings for the third quarter of 2025. The company achieved an earnings per share of $1.82, surpassing the forecast of $1.75, and generated revenue of $4.15 billion, exceeding the anticipated $4.09 billion. Additionally, Kimberly-Clark has agreed to acquire Kenvue in a cash and stock transaction valued at approximately $48.7 billion. Under the terms of the deal, Kenvue shareholders will receive $3.50 per share in cash and 0.14625 Kimberly-Clark shares for each Kenvue share, totaling $21.01 per share based on Kimberly-Clark’s closing price on October 31. This acquisition has provided relief to several activist hedge funds that held significant stakes in Kenvue, as they faced potential losses due to a recent drop in Kenvue’s share price. The transaction has also raised concerns related to ongoing Tylenol lawsuits, affecting investor sentiment. These developments mark significant moves for Kimberly-Clark in the current financial landscape.
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