Most of the analysts providing the ratings on Clorox (CLX) maintain a neutral stance on the stock despite the company’s strong performance amid sluggish industry trends. Consumer product companies in the US (SPY) have struggled in the past several quarters to lift sales. A deceleration in category growth rate and increased competition is taking a toll on their top line metrics.
However, Clorox managed to report improved sales, thanks to its strong portfolio of category-leading brands. Its investment in innovation seems to be paying off as its new product launches are generating higher sales and are expected to drive the company’s revenues.
However, analysts remain on the sidelines as an industry-wide slowdown, increased competitive activity, an adverse mix, and trade promotions are expected to hurt Clorox’s sales growth rate.
Pressure on earnings from inflation in commodity prices, as well as increased manufacturing and logistics costs, could also keep analysts at bay. The company’s current valuation might seem a bit too high for investors.
Ratings summary and target price
About 76.0% of the analysts covering Clorox stock gave “hold” recommendations. Plus, 12.0% of these analysts rated it a “buy,” and another 12.0% of analysts suggested a “sell” rating.
Analysts suggest a target price of $134.92 per share on Clorox stock, which reflects a 6.1% upside to the stock’s closing price of $127.21 on October 24. Recently, Jefferies lowered its target price on CLX stock to $132.00 from $137.00.