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Goldman Sachs Downgraded Church & Dwight Rating to ‘Sell’

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Jan. 14 2016, Updated 2:44 p.m. ET

Price movement of Church & Dwight

Church & Dwight (CHD) has a market cap of $10.3 billion. It fell by 6.1% to close at $78.65 per share on January 13, 2016. The price movement on a weekly, monthly, and year-to-date (or YTD) basis is -4.6%, -6.2%, and -7.3%, respectively.

Technically, the stock has broken its support and is trading below all moving day averages. Currently, CHD is trading 6.7% below its 20-day moving average, 7.1% below its 50-day moving average, and 7.0% below its 200-day moving average.

The PowerShares DWA Consumer Staples Momentum Portfolio (PSL) invests 4.5% of its holdings in Church & Dwight. The ETF tracks an index of US consumer cyclical firms selected and weighted by price momentum. The YTD price momentum of PSL is -1.9% as of January 12, 2016.

The market caps of Church & Dwight’s competitors are as follows:

  • The Procter & Gamble Company (PG): $206.4 billion
  • Colgate-Palmolive (CL): $56.4 billion
  • The Clorox Company (CLX): $16.5 billion
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Performance of Church & Dwight in 3Q15

Goldman Sachs downgraded Church & Dwight from “neutral” to “sell.” Church & Dwight reported 3Q15 net sales of $861.8 million, a rise of 2.4% compared to the net sales of $841.8 million in 3Q14. Its net income and EPS (earnings per share) rose to $120.4 million and $0.90, respectively, in 3Q15, compared to its net income and EPS of $115.9 million and $0.85, respectively, in 3Q14.

Meanwhile, its cash and cash equivalents fell by 50.2% and inventories rose by 11.5% in 3Q15 compared to 4Q14. Its long-term debt-to-equity ratio rose to 0.34 in 3Q15 compared to the long-term debt-to-equity ratio of 0.33 in 4Q14.

The PE (price-to-earnings) and PBV (price-to-book value) ratios of Church & Dwight are 26.0x and 5.0x, respectively, as of January 13, 2016. The company has projected EPS of $0.79 to $0.81 and $3.22 to $3.24 for 4Q15 and fiscal 2015, respectively.

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