$53.45
$115.80
bear $53.45
base $77.56
bull $115.80
margin of safety $50.00
market price* $105.57
Kimberly-Clark makes everyday paper and personal-care products sold under long-established brands such as Huggies, Pull-Ups, Kleenex, Scott, Cottonelle, Kotex, Poise and Depend. Two deals are reshaping what a shareholder owns. On July 1, 2026 the company closed the sale of 51% of its international tissue and professional business to Suzano for about $1.7 billion in cash, keeping a 49% stake in the new joint venture. And on November 2, 2025 it agreed to buy Kenvue (Tylenol, Listerine, Neutrogena, Band-Aid, Aveeno, Zyrtec) for $3.50 in cash plus 0.14625 Kimberly-Clark shares per Kenvue share: roughly $6.7 billion of cash and about 280 million new shares. Both companies' shareholders approved the merger in January 2026 and the U.S. antitrust waiting period has expired; closing is expected in late 2026 once foreign approvals arrive. Because existing holders cannot opt out, we value a Kimberly-Clark share as a share of the combined company, about 613 million shares in total. How we measure earnings. We start from the cash the business generates from operations, strip out short-term swings in inventories, receivables and payables, and deduct stock-based pay and capital spending. Revenue has been roughly flat for a decade, so all capital spending is treated as the cost of keeping the business running. Interest is added back, so we value the business first and then subtract what it owes. On that basis Kimberly-Clark produced between about $1.9 billion and $2.6 billion a year from 2016 to 2025, with a ten-year median of about $2.27 billion and no upward trend in dollars, even though buybacks cut the share count from 362 million to 333 million. From that median we remove 51% of the tissue business's cash flow (about $184 million a year, based on its 2023 to 2025 results), leaving about $2.08 billion. Kenvue produced about $1.95 billion, $2.09 billion and $1.97 billion in 2023, 2024 and 2025; we use $1.97 billion. The combined starting level is about $4.06 billion a year, or about $6.61 per combined share. Recent direction. Combined cash earnings fell about 7.7% in 2025. At Kimberly-Clark the drop came mostly from capital spending, which rose from $721 million to $1.14 billion and is guided to about $1.3 billion in 2026, partly for its 2024 Transformation Initiative; first-half 2026 spending was $776 million. Kenvue's sales slipped about 2% in 2025 and its cash earnings fell about 6%, although its first half of 2026 was better, with sales up about 4% and net income up about 25%. Our base case therefore assumes the first year falls by the same 7.7% before returning to the normal level in year three, as the elevated capital program winds down. Base case: no growth and no merger savings. Management has announced $1.9 billion of cost savings and $500 million of extra profit from cross-selling, but those are targets, not results, so we leave them out. We do charge the $2.5 billion of one-time integration cash costs the company expects to spend in the first two years (about $1.9 billion after tax). After that, cash earnings stay flat at about $4.06 billion a year with no end date, because brands like Huggies, Kleenex, Tylenol and Listerine have held their places for generations. The business is worth about $65.4 billion. Debt is about $19.1 billion: Kimberly-Clark's own $6.5 billion, Kenvue's $8.5 billion and the $6.7 billion cash payment, plus minority partners' stakes, less the $1.7 billion tissue proceeds (counted before any tax, because the filings do not give the tax bill) and spare cash. We knock about $1.2 billion off that figure because much of the debt is fixed-rate borrowing at about 3.5% to 5%, cheaper than our 6% rate, leaving about $17.9 billion. That gives equity of about $47.6 billion, or $77.56 per share. Bear case. Kimberly-Clark's cash earnings settle at the low end of its ten-year range (about $1.73 billion after the tissue sale), as they did in 2018 and 2021 when costs jumped. Kenvue keeps shrinking by 3% a year for five years, continuing its 2025 decline. Integration costs run 25% over plan. After year ten, private-label competition wears earnings down by 1% a year. The business is worth about $50.6 billion, less about $17.9 billion of debt, leaving $32.8 billion, or $53.45 per share. Even here, cash earnings cover the roughly $1 billion annual interest bill more than twice. Kenvue faces lawsuits over Tylenol, including one by the Texas Attorney General. Nothing in the filings lets us size those claims, so they are not in the numbers. A large settlement could push value below this case. Bull case. After 2026 the extra capital spending ends and both companies return to their 2024 cash earnings (about $2.29 billion for Kimberly-Clark after the tissue sale and $2.09 billion for Kenvue). Removing the second head office, board and stock listing saves about $300 million a year after tax, a cost that disappears once the merger closes. Kimberly-Clark's sales have grown about 1% a year over the past decade, and in this case earnings grow at that same pace. The business is worth about $88.9 billion, less $17.9 billion of debt, leaving $71.0 billion, or $115.80 per share. What has changed. Our previous estimate (bear $22.70, base $65.50, bull $112.60) valued Kimberly-Clark alone, before the tissue sale closed, and used higher discount rates. We now count the Kenvue deal and the tissue sale as done and discount every case at 6%. On the same basis, Kimberly-Clark alone would be worth about $94 per share, and Kenvue's business about $13 per Kenvue share against the roughly $17 in cash and stock Kimberly-Clark is paying (valuing its shares at our $94 estimate). Unless the promised savings show up, the deal costs Kimberly-Clark shareholders about $16 a share of value. What would make this wrong. Each $100 million a year of lasting after-tax savings adds about $2.70 per share, so delivering the full $1.9 billion pre-tax target would move value well toward the bull case. In the other direction, a large Tylenol settlement, a failed integration, or a return to Kenvue's 2025 decline would pull value toward the bear case. If foreign regulators block the deal, Kimberly-Clark stays on its own, which on our numbers is worth more per share, though a $1.1 billion break fee could be owed in some circumstances.