Jefferies Initiates Hold Rating on Kimberly-Clark

Jefferies has initiated coverage of Kimberly-Clark KMB with a Hold rating and $67 price target. Competitive pressures are one reason for KMB's Hold rating. P&G and private label are challenging KMB in most of the categories they compete in. P&G is also cited as being more "promotional and innovative" and they have taken share in some categories KMB competes in. In a note to clients, Jefferies writes, "Our $67 PT is 13x-14x our 2011E EPS of $4.95, below its pre-recession average of 16x due to current pressures on earnings from input cost inflation and competition. Risks include market risk, economic impact on consumer demand, commodity cost pressures, international operations risks, integration of acquisitions, competition." KMB closed Monday at $62.18.