From CNBC · Jeff Marks · · 1m 20s
Buying Kimberly-Clark before Kenvue deal closes
Jim Cramer's trust is adding shares of the tissue and personal care company despite recent setbacks, betting on a major acquisition to drive growth.
In brief
Jim Cramer's trust is adding shares of the tissue and personal care company despite recent setbacks, betting on a major acquisition to drive growth. Short-term headwinds like production delays and China struggles matter less than the long-term upside from acquiring Kenvue's consumer brands like Tylenol and Band-Aid…
Adding to Kimberly-Clark position
Jim Cramer's Charitable Trust is buying 100 more shares of Kimberly-Clark at roughly $98 each, raising its stake to 465 shares and increasing portfolio weighting from 0.9% to 1.15%.
Recent profit warning and delays
Kimberly-Clark warned that third-quarter sales and earnings per share are trending below forecasts after the company delayed a product innovation launch due to production issues.
Multiple headwinds hitting sales
The company faces timing issues from poor product execution, destocking by distributors, depressed Huggies diaper sales in China from false quality claims, and higher freight costs plus retaliatory tariffs.
Kenvue acquisition looks promising
The upcoming acquisition of Kenvue, which owns brands like Tylenol and Band-Aid, is running ahead of synergy expectations and management expressed confidence in the integration.
“synergy planning is running ahead of expectations”
Long-term catalyst justifies buying
Despite recent softness, the potential upside and growth boost from the Kenvue deal make this a good time to pick up more shares of the defensive stock.
At a glance
Short-term headwinds like production delays and China struggles matter less than the long-term upside from acquiring Kenvue's consumer brands like Tylenol and Band-Aid.
