Kimberly-Clark report increases inventory of household products


Kimberly-Clark Corporation (KMB) shares rose more than 2% on Thursday after the household products company reported better-than-expected results for the second quarter (Q2). The company behind Huggies and Kotex posted adjusted earnings of $ 2.20 per share, significantly exceeding Wall Street expectations of $ 1.80 per share. Meanwhile, revenue of $ 4.61 billion was 3.4% above the consensus estimate. Unsurprisingly, the bottom line was boosted by the company’s consumer bathroom tissue segment, which grew 12% year over year amid continued demand for toilet tissue throughout the pandemic.

Management expects annual earnings per share (EPS) of between $ 7.40 and $ 7.50, up from its previous forecast range of $ 7.10 to $ 7.35. The company also announced plans to reinstate its share buyback program, with plans to repurchase $ 700 million to $ 900 million of its shares this year. The move indicates an improving outlook for the industry in the second half of the year, which bodes well for other household products stocks.

From a technical standpoint, Kimberly-Clark shares broke crucial overhead resistance at $ 145 after the company released encouraging financial results. The breakout, which occurred on above-average volume, places the stock at an all-time high, with additional buying potential based on momentum. Short-term tactical traders could use a trailing candlestick stop to exit their position. To implement this technique, increase the stop order below the low of the current day or the low of the day before, depending on risk tolerance.. Just stay in the trade until you stop.

Below, we take a closer look at two other large-cap household products stocks that have rallied to sympathy thanks to strong earnings from Kimberly-Clark.

Church & Dwight Co., Inc. (CHD)

Church & Dwight Co., In. (CHD) sells personal care and specialty products in the United States and around the world. Wall Street expects the 174-year-old company to report a 24% drop in second-quarter profits when it releases its results on July 31. Credit Suisse analyst Kaumil Gajrawala last month upgraded Church & Dwight stock to “outperform” saying the company’s operating model suits the current environment. He argues that the company’s portfolio can survive a recession, with around 37% of sales coming from discount brands. Gajrawala also believes that the current landscape offers an opportunity for further acquisitions. Trading at $ 86.22, with a market cap of $ 21.2 billion and offering a dividend yield of 1.13%, the stock returned 23.26% for the year, beating the average for the year. household and personal products industry by nearly 20% as of July 24, 2020.

Church & Dwight stock broke a multi-year trading range earlier this month, with gains consolidating over the past two weeks. Price regained its bullish momentum on Thursday after optimistic Kimberly-Clark earnings to record a new all-time high. Those entering here should consider using an overlay indicator, such as the 10-day Simple Moving Average (SMA), as a trailing stop. For example, traders would stay in trade until the stock closes below the indicator.

Newell Brands Inc. (NWL)

With a market value of $ 7.25 billion, Newell Brands Inc. (NWL) markets and distributes commercial products. The company’s food and shopping segment saw net sales increase 3.2% year-over-year in the first quarter on the back of pandemic-related demand for home storage products and cleaning solutions and commercial maintenance. Analysts expect the home products maker to post 15-cent second-quarter EPS when it releases financial results on July 31. Although Newell Brands stock is trading down 8.69% year-to-date, it has gained 37.5% in the past three months. Investors also receive a good dividend yield of 5.5%.

Newell’s shares surged upward in mid-May, but have since traded in a symmetrical triangle. Price finally broke above the upper pattern trendline on Thursday, which could initiate the next wave to the upside. Swing traders who execute a long position at these levels should set a take profit order close to $ 20, where price may meet resistance from a large double top formed between November and February. Protect capital by placing a stop just below the 200 day SMA.


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