April 9, 2008 / 4:07 PM / 12 years ago

UPDATE 1-RESEARCH ALERT-Goldman cuts Kimberly-Clark to sell

(Adds details)
 April 9 (Reuters) - Goldman Sachs downgraded Kimberly-Clark Corp (KMB.N), the maker of Huggies diapers and Kleenex tissues,  to “sell” from “neutral,” citing the company’s exposure to cost inflation that could pressure its earnings in 2008.
 Goldman said Kimberly-Clark’s diaper business is still healthy, particularly overseas, though there were increasing concerns about share erosion to P&G in the US based on the brokerage’s discussions with retail buyers.
 The brokerage also downgraded both Procter & Gamble Co (PG.N) and Bare Escentual Inc BARE.O to “neutral” from “buy.”
The brokerage in a research note said it cut P&G due to its slowing sales growth even after significant investment to broaden the portfolio.
 On Bare Escentual, it said long-term story looks attractive, but in the short term, “investors are likely to remain on sidelines for a small-cap growth stock with exposure to discretionary consumer spending.”
 Goldman, however, maintained its “attractive coverage” rating on the U.S. household products sector, citing its defensive nature in a weak U.S. economy and said it expects the sector companies to beat consensus on emerging market growth and foreign exchange benefits.
 Goldman also said coverage of the sector will now be assumed by Andrew Sawyer, who is replacing Amy Chasen.
  Following are the rating and price-target changes by Goldman Sachs on six household products companies: Company     
       RIC        Rating        Price Target
                                          (in U.S. $)
                            Current Prior  Current  Prior Colgate-Palmolive Co  (CL.N)   Buy     Buy      88     85 Bare Escentuals Inc   BARE.O Neutral Buy      28     30 Procter and Gamble Co (PG.N)   Neutral Buy      75     73 Estee Lauder Cos Inc  (EL.N)   Neutral Neutral  47     48 Clorox Co         
(CLX.N)  Neutral Neutral  62     66 Kimberly-Clark Corp   (KMB.N)  Sell    Neutral  63     71  (Reporting by Biswarup Gooptu in Bangalore; Editing by Anil D’Silva)   

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below