Kimberly-Clark (KMB) shares have risen by more than 2% Thursday, after the household products company reported better-than-expected second quarter (Q2) results. The company behind the Huggies and Kotex posted adjusted earnings of $2.20 per share, easily surpassing Wall Street expectations of $1.80 per share. During this time, revenues of $4.61 billion came from 3.4% above the consensus estimate. Not surprisingly, the bottom line has been reinforced by the company’s consumer tissue segment, which grew 12% year on year in the midst of ongoing demand for the toilet paper throughout the pandemic.
The management expects net earnings per share (EPS) of between $7.40 and$ 7.50, up from its previous forecast range of between $7.10 and$ 7.35. The company has also announced its intention to reinstate its share repurchase program, plans to buy back $700 million to $ 900 million of its shares this year. The movement indicates an improvement in the outlook for the industry in the second half, which bodes well for the other household products stocks.
From a technical perspective, Kimberly-Clark stock has broke above the crucial overhead resistance at $145 after the company has delivered its encouraging financial results. The meeting, which took place on above-average volume, place de la bourse, at an all-time high, with the possibility of a new impetus based on the purchase. Short-term tactical traders can use a trailing chandelier stop to exit their position. To implement this technique, the lifting of the stop order under the current day low or previous day low, depending on the risk tolerance. Just stay in the trade until stopped.
Below, we look more closely at the other two large-cap, household goods, stocks of which have the sympathy to the back of Kimberly-Clark’s stellar earnings.
Church & Dwight Co., Inc. (CHD)
Church & Dwight Co., Inc. (CHD) sells personal care and specialty products in the united States and in the world. Wall Street waits for the 174-year-old company reported a 24% decline in Q2 earnings when it releases results on July 31. Last month, Credit Suisse analyst Kaumil Gajrawala upgraded Church & Dwight stock to “outperform” saying the firm’s operating model is appropriate to the current environment. He argues that the company’s portfolio can survive a recession, with approximately 37% of the revenue from the value-priced brands. Gajrawala also believes that the current landscape provides an opportunity for acquisitions. Trading at $86.22, with a market capitalization of $ 21.2 billion and offering a 1.13% dividend yield, the stock has returned 23.26% year-on-year, outperforming the household and personal products industry average by nearly 20% as of July 24, 2020.
Church & Dwight stock broke above several years of trading range earlier this month, with gains of consolidation over the past two weeks. Price found his progress Thursday, following Kimberly-Clark’s optimistic profit to register a new all-time high. Those who enter here, consider the use of an indicator of overlay, such as the 10-day simple moving average (SMA) as a trailing stop. For example, the traders remain in the trade until the stock closes below the indicator.
Newell Brands Inc. (NWL)
With a market value of $ 7.25 billion, Newell Brands Inc. (NWL) markets and distributes commercial products. The food business and the commercial sector, has seen net sales rise of 3.2% year on year in the first quarter thanks to the pandemic tied to the demand for home storage products and commercial cleaning and maintenance solutions. Analysts expect the home products manufacturer to post Q2 EPS of 15 cents when it discloses financial results on July 31. Although Newell Brands stock trading 8.69% lower for the year to date, it has gained 37.5% in the last three months. Investors also receive a healthy 5.5% dividend yield.
Newell shares made an impulsive wave higher to mid-May, but have traded within a symmetrical triangle since. The price has finally broken above the model top trend on Thursday, in a move that could launch the next wave of growth. Swing traders who execute a long position at these levels should put a take-profit order close to 20$, if the price may run into resistance from a prominent double top formed between November and February. Protect the capital by placing a stop just below the 200-day SMA.