Clorox Sees Stock Gains Amid Improved Earnings Outlook
Headquartered in Oakland, California, The Clorox Company (CLX) is a top maker and seller of both consumer and professional products. With a market cap of $18.8 billion, Clorox offers a range of items including household cleaners, bleach, charcoal, cat litter, dressings and sauces, personal care products, and trash bags.
Clorox Stock Performance Falls Short of Broader Market
Over the past year, shares of CLX have declined compared to the broader market. CLX’s stock has increased by 21.5%, while the S&P 500 Index ($SPX) has grown almost 30.4%. In 2024 alone, CLX shares climbed 17.6%, but this still trailed the SPX’s increase of 23.1% for the same period.
Comparison with Consumer Staples Sector
Looking closer, CLX has outperformed the Consumer Staples Select Sector SPDR Fund’s (XLP) gains, which were only 13.5% over the past year and 11% in 2024.
On October 30, Clorox released its Q1 earnings, leading to a more than 3% increase in its stock over the next two trading sessions. The positive results stemmed from better-than-expected performance, a full recovery in market share, and a strong array of products. The company’s IGNITE strategy also significantly contributed to improvements in gross margins and earnings per share (EPS), laying a foundation for future growth.
Analysts Have Optimistic Expectations
For the current fiscal year, which ends in June 2025, analysts predict Clorox’s EPS will increase by 11% to $6.85 on a diluted basis. Notably, the company has consistently outperformed earnings expectations, surpassing consensus estimates in each of the last four quarters.
Analysts Adjust Ratings and Price Targets
Among the 20 analysts covering CLX, the consensus rating now stands at “Hold,” up from “Moderate Sell” just two months ago. This rating includes one “Strong Buy,” 14 “Hold” ratings, and five “Strong Sells.”
TD Cowen Upgrades Clorox’s Rating
On November 6, TD Cowen upgraded Clorox from “Sell” to “Hold,” raising the price target from $155 to $170. Analysts suggest that Clorox’s ability to exceed earnings expectations and make strategic investments could enhance its competitive edge in the home and personal care sectors. Improvements after a cyberattack hint that FY25 guidance may be conservative, presenting opportunities for EPS surprises and upward adjustments, which could positively affect the stock price.
Stock Shows Upside Potential
Currently, CLX trades above its average price target of $160.17. However, the optimistic street-high price target of $188 indicates potential growth of 12.1%.
On the date of publication, Kritika Sarmah 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.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
