After Kraft Heinz (KHC) confirmed it had approached Unilever (UN, UL) with a merger proposal, RBC Capital analyst Nik Modi says the news come as a surprise, but does not warrant a change in his Edgewell Personal Care (EPC) takeout thesis. The analyst reiterates an Outperform rating on the latter's shares, with a $105 price target, on improving margin and revenue profile and the prospects of a takeout in the next 12-16 months, with Unilever as one of the more likely buyers. Other potential suitors include Kimberly-Clark (KMB), Beiersdorf, Henkel, Johnson & Johnson (JNJ), Colgate-Palmolive (CL), Church & Dwight (CHD), L'Oreal (LRLCY), and Kao, he adds.

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Based on current spot rates: The company is raising its net sales growth guidance to 2% to 5% (versus 1% to 4% previously) including a mid-single-digit negative impact from foreign exchange (versus low-single-digit negative impact previously). FY24 revenue consensus $18.83B. The company is raising its organic sales growth guidance to 5% to 7% (versus 3% to 5% previously). On a GAAP basis, the company still expects gross profit margin expansion, increased advertising investment and double-digit earnings-per-share growth. On a non-GAAP (Base Business) basis, the company still expects gross profit margin expansion, increased advertising investment and mid to high-single-digit earnings-per-share growth.

Reports Q1 revenue $5.07B, consensus $4.63B. Noel Wallace, Chairman, President and Chief Executive Officer, commented on the Base Business first quarter results, "We are very pleased to have started 2024 with another quarter of strong top and bottom line performance as we continued to execute our strategy successfully. Net sales increased 6.2% and organic sales grew 9.8%, with organic sales growth in every division and across all categories. We are particularly pleased to have delivered double-digit growth in operating profit, net income and earnings per share for the third consecutive quarter while still investing for the long-term health of our business. The strong gross and operating margin expansion in the quarter funded a 16% increase in advertising and we expect strong levels of brand investment over the balance of 2024. We also continued to invest behind building and scaling the capabilities needed to drive our growth going forward, in areas like innovation, digital, data and analytics, revenue growth management and marketing effectiveness. Our strong growth momentum and great start to the year add to our confidence that we are executing the right strategies to deliver on our updated 2024 financial targets and generate consistent, compounded earnings per share growth."

Notable companies reporting before tomorrow's open, with earnings consensus, include Exxon Mobil (XOM), consensus $2.20... Chevron (CVX), consensus $2.87... AbbVie (ABBV), consensus $2.23... HCA Healthcare (HCA), consensus $5.01... Colgate-Palmolive (CL), consensus 81c... Charter (CHTR), consensus $7.92... AutoNation (AN), consensus $4.27.

Barclays analyst Lauren Lieberman raised the firm's price target on Kimberly-Clark to $136 from $132 and keeps an Equal Weight rating on the shares. The company reported strong Q1 results, both on productivity and volume, the analyst tells investors in a research note.

Deutsche Bank raised the firm's price target on Kimberly-Clark to $139 from $134 and keeps a Hold rating on the shares following the Q1 report.