- 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.
For further details see:
Kimberly-Clark Could Correct Given The Pulp Rally