Underinvestment to Affect KMB’s Growth

Analyst Lauren R Lieberman of Barclays Capital downgrades Kimberly Clark Corp (NYSE: KMB) from “equal weight” to “underweight,” while reducing his estimates for the company. The target price for KMB has been reduced from $68 to $66.

According to Barclays Capital, Kimberly Clark’s underlying fundamentals are deteriorating. Although KMB has posted healthy results for the past couple of quarters and issued strong guidance, the company is not reinvesting enough to secure future growth, the analyst says.

KMB’s earnings and revenue growth may become more modest than that of its peers during 2010 due to underinvestment. Barclays Capital has reduced its EPS estimates for 2009 and 2010 from $4.76 to $4.75 and from $5.11 to $5.09, respectively.