Church & Dwight: Resilient Performance Despite Market Challenges
New Jersey-based Church & Dwight Co., Inc. (CHD) boasts a market cap of $27.4 billion, establishing itself as a leader in household and personal care products. Well-known for its ARM & HAMMER baking soda, the company offers an extensive range of items, including laundry detergents, cat litter, and cleaning supplies.
The company’s diverse portfolio features popular brands such as TROJAN, OXICLEAN, and WATERPIK, making it a household name globally. Beyond consumer goods, Church & Dwight also plays a vital role in specialty markets, supporting agriculture and livestock. Its adaptability and growth trajectory are evident in both its product lines and strategic initiatives.
In terms of stock performance, shares of Church & Dwight have increased by 18.9% over the past 52 weeks and experienced an 18.3% rise year-to-date (YTD). Although these numbers reflect solid growth, it falls short when compared to the broader S&P 500 Index ($SPX), which has risen by 31% over the last year and returned 25.2% YTD.
However, when comparing to the Consumer Staples Select Sector SPDR Fund (XLP), which achieved only 16.7% gains over the past year and 13.6% YTD, CHD shows stronger performance.
Though Church & Dwight confronts hurdles such as high valuations and sluggish growth in pivotal brands like Therabreath and Hero, it remains competitive against industry peers. The gummy vitamin sector has seen decreased sales, and the U.S. consumer market’s gradual slowdown presents additional challenges.
The company, however, remains steady. Recent operational improvements signal its ongoing potential, highlighted by the company’s upcoming Q3 earnings report. Following a stronger-than-anticipated earnings release on Nov. 1, CHD stock rose by 4.8%. The reported revenue of $1.5 billion represented a 3.8% year-over-year increase, and non-GAAP earnings increased 6.8% to $0.79 per share, exceeding forecasts by 16.2%.
For the current fiscal year, ending in December, analysts project Church & Dwight’s adjusted earnings per share (EPS) to grow by 8.8%, reaching $3.45. The company’s history of earnings surprises is notable, as it has exceeded consensus estimates in the last four quarters.
A total of 23 analysts cover CHD stock, with the consensus rating classified as a “Moderate Buy.” This consensus includes nine “Strong Buy” ratings, 11 “Hold” ratings, and three “Strong Sell” ratings.
Despite a stable overall rating, the stock recently attracted a “Strong Buy” rating over the past three months, indicating increasing bullish sentiment.
Post Q3 report, the stock met with mixed market responses. On Nov. 4, Deutsche Bank (DB) raised its price target to $115 from $114 while maintaining a “Buy” rating, commending the company’s strength in light of solid Q3 results.
In contrast, Barclays (BCS) lowered its outlook, adjusting the target to $85 from $86 and retaining the “Underweight” rating. The firm noted concerns over upcoming trends despite Church & Dwight’s strong recent performance.
Currently, the stock prices exceed the average target price of $108.24, but the highest target of $124 suggests a possible 10.8% upside.
On the date of publication, Sristi Jayaswal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information, please view the Barchart Disclosure Policy here. More news from Barchart
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