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Why JPMorgan Chase Has Downgraded Clorox Stock

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Clorox downgraded to “underweight”

The Clorox Company (CLX) stock fell ~1% on April 8 after JPMorgan Chase downgraded it to an “underweight” from a “neutral” and reduced its target price to $139 from $159. Distribution losses and the negative impact from tariffs are also expected to hurt Clorox stock. Currency volatility is also expected to limit its top line growth.

The stock’s reduced target price indicates a potential downside of ~11% based on its closing price of $155.60 on April 5.

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The company’s Household segment, which includes bags and wraps, cat litter, charcoal, and digestive health, is facing challenges amid distribution losses in the bags and wraps business. Meanwhile, the charcoal business was affected by a shift in the timing of its shipments.

We expect Clorox’s Household segment to continue to face challenges in the coming quarters. However, innovation-driven products are expected to support its sales.

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Rating and target price

Among the 18 analysts tracking CLX, nine have given it “holds,” five have given it “sells,” and four have given it “buys.” Analysts have a target price of $153 per share on CLX, which implies a potential downside of 1.7% based on its closing price of $155.60 on April 5.

Besides Clorox, the majority of analysts recommend “holds” on the shares of Procter & Gamble (PG), Kimberly-Clark (KMB), Church & Dwight (CHD), and Colgate-Palmolive (CL).

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