• HEDGEYE’S MARKET BRIEF
    Our FREE Investing Newsletter
    Get Exclusive Summer Sale Discounts

    By joining our email marketing list you agree to receive marketing emails from Hedgeye. You may unsubscribe at any time by clicking the unsubscribe link in one of the emails. All Hedgeye products and services are subject to Hedgeye’s Terms of Service available at www.hedgeye.com/terms_of_service

Kimberly-Clark (KMB) is reporting Q4 2012 earnings on January 25 along with Procter & Gamble (PG). We think there’s an interesting setup here for a long PG/short KMB trade. Commodity prices including oil and pulp have moved against the company over the last quarter of 2012, which will put the squeeze on earnings along with strategic marketing expenditures.

As for PG, we estimate Q2 EPS of $1.13 versus a guidance range of $1.07 to $1.13. In our experience, we see PG beating estimates and raising guidance, which will drive the stock higher. 

Crushed By Commodities? - image008

Crushed By Commodities? - image009