Analysts recommend “hold”
Most analysts covering Church & Dwight (CHD) stock have recommended “hold,” despite the company’s strong sales and earnings performance in the past two quarters and upbeat guidance. Church & Dwight’s sales and adjusted earnings grew by double digits during the last reported quarter, and they are expected to sustain that momentum in 1Q18.
In 2018, the company expects its top line to rise 8% thanks to acquisitions, and it expects organic volumes to rise due to its balanced portfolio of premium and value brands. However, price competition is expected to hurt the company’s organic sales growth, which is forecast to be 3%.
Church & Dwight’s adjusted earnings per share are projected to grow 16%–18% in 2018, reflecting strong sales, productivity savings, and lower tax. The company expects its gross margin to stay the same in 2018, a favorable prediction, as peers’ margins are being impacted by input cost inflation and lower pricing.
Despite the company’s upbeat outlook, analysts believe that soft sales, lower pricing, and manufacturing and transportation cost inflation could restrict any upside for consumer product makers. Most analysts have recommended “hold” for Church & Dwight, Procter & Gamble (PG), Clorox (CLX), Kimberly-Clark (KMB), and Colgate-Palmolive (CL).
Rating summary for CHD
Of the 20 analysts covering CHD stock, 50% have recommended “hold,” 25% have recommended “buy,” and 25% have recommended “sell.” Analysts’ price target of $50.56 for CHD stock implies a 10.3% upside based on its closing price of $45.84 on April 20, 2018.