ESSYY - Kimberly-Clark Could Correct Given The Pulp Rally

• The pulp rally has extended, and similar to Swedish peer Essity, the impact will be meaningful on coming quarterly results for KMB.
• We think that a reopening could maintain pulp prices, even if some reversal is expected in the latter half of the year.
• In previous periods where pulp prices were high, KMB suffered, and with high recovered paper and chemical prices too, it should be even worse this time around.
• While there will be some multiple flex as investors discount the current commodity stricken year, we think there is only downside for KMB at current prices.

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