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Deutsche Bank Downgrades Church & Dwight Company to ‘Hold’

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Price movement

Church & Dwight Company (CHD) has a market cap of $11.5 billion. It rose 0.49% to close at $44.74 per share on January 18, 2017. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 2.7%, -0.25%, and 1.2%, respectively, on the same day.

CHD is trading 0.73% above its 20-day moving average, 0.79% above its 50-day moving average, and 5.4% below its 200-day moving average.

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Related ETF and peers

The Guggenheim S&P Equal Weight Consumer Staples ETF (RHS) invests 2.7% of its holdings in Church & Dwight. The YTD price movement of RHS was 1.3% on January 18.

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

  • Procter & Gamble (PG) — $226.8 billion
  • Colgate-Palmolive (CL) — $60.3 billion
  • Clorox (CLX) — $15.7 billion

CHD’s rating

On January 18, 2017, Deutsche Bank has downgraded Church & Dwight Company’s rating to “hold” from “buy.” It also reduced the stock’s price target to $46.00 from $48.00 per share.

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Performance of Church & Dwight in 3Q16

Church & Dwight (CHD) reported 3Q16 net sales of $870.7 million, a rise of 1.0% compared to net sales of $861.8 million in 3Q15. Sales of Household Products rose 2.4%, and sales of Personal Care Products fell 0.4% in 3Q16 compared to 3Q15.

The company’s gross profit margin and operating margin expanded 60 basis points and 40 basis points, respectively, in 3Q16 compared to 3Q15.

CHD’s net income and EPS (earnings per share) rose to $124.0 million and $0.47, respectively, in 3Q16 compared to $120.4 million and $0.45, respectively, in 3Q15.

CHD’s cash and cash equivalents fell 29.7%, and its inventories rose 4.3% between 3Q16 and 4Q15.

Projections

Church & Dwight (CHD) made the following projections for fiscal 2016:

  • reported and organic sales growth of ~3%
  • gross margin of 110 basis points
  • adjusted EPS growth of 8%

For an ongoing analysis of this sector, please visit Market Realist’s Consumer Discretionary page.

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