Inflation Drags Down Narrow-Moat Kimberly-Clark's Q3 Profits; Shares Not a Bargain

We don’t plan to alter our $126 fair value estimate (outside of a low-single-digit time value bump) for Kimberly-Clark after digesting third-quarter marks. The firm chalked up 5% organic sales gains but struggled to harvest profits, with operating margins off 190 basis points to 13%. This was primarily driven by raw material, packaging, transportation, and logistics costs that have yet to abate, serving as a more than 700-basis-point hit to gross margins in the quarter (which held flat at 30.5%).