Recent developments at Kimberly-Clark (
) indicate that the company could see a significant jump in
revenues over the next 12-24 months. This would be made possible by
further expansion of the company's market share in Venezuela for
bathroom products, which currently stands at 15%. Kimberly-Clark's
recent agreements with Premier Healthcare Alliance would also
result in stronger growth for its medical disposable products'
See Our Full Analysis for Kimberly-Clark's
Kimberly-Clark has also redesigned few of its products,
including the popular GoodNites Underwear, to improve their
functionality and increase unit sales. We expect the redesigned
products to gain traction with customers, translating into improved
top line for this division.
Capacity Expansion In Venezuela Hints Towards Higher
Future Market Share
Kimberly-Clark recently announced its plans to expand Venezuelan
production capacity by investing $37.1 million (234 million
Bolivar) over the next 6-24 months. Kimberly-Clark currently has a
15% market share for toilet papers in Venezuela. The country is
facing an uneasy shortage of basic bathroom products due to adverse
economic conditions and import frictions.
Venezuela accounted for about 2% of consolidated net sales of
Kimberly-Clark for the year ended December 31, 2012. The company's
latest decision to invest $37.1 million would increase the current
production capacity by about 40%, which can translate into higher
sales. The growth in Venezuela alone would drive up the
consolidated revenues by about 1% over the next 12-24 months. This
would also increase the company's market share in Venezuela to
about 21%. Tissue papers currently account for over 40% of the
stock's intrinsic value, which may see an uptick following the
Healthcare Alliance Agreements To Strengthen Medical
Kimberly-Clark has been awarded three group purchasing
agreements with the Premier Healthcare Alliance for its KimVent
Oral Care products and the Pediatric Microcuff Endotracheal Tube.
Premier Healthcare Alliance is the United States' largest network
of community hospitals and other healthcare facilities, enabling
them to save costs by sourcing medical disposables and other
products in bulk. Premier Healthcare Alliance has in its network
about 2,800 U.S. community hospitals and about 95,000 non-acute
healthcare facilities and physician offices.
Under the three contracts, the network hospitals and other care
sites will be able to procure KimVent Oral Care products and the
Pediatric Microcuff Endotracheal Tube from Kimberly-Clark at a
specially negotiated price. Kimberly-Clark will benefit from higher
volume sales as more than 50% of the total number of hospitals and
other care sites in the U.S. are tied to the network of Premier
Healthcare Alliance. Kimberly-Clark medical disposables division
currently has about 1.07% market share globally, which would rise
in the coming quarters due to these agreements.
Trefis price estimate for Kimberly-Clark stands at
, which is in line with the current market price.
a Company's Products Impact its Stock Price at Trefis
The GoodNites Bed Mats were declared 'Product of the Year' for
providing children and their moms an alternative choice to manage