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On Monday, Barclays (LON:BARC) increased the price target for Church & Dwight Co. Inc. (NYSE:CHD) shares from $90.00 to $93.00, while maintaining an Underweight rating on the stock. Barclays analyst Lauren Lieberman provided insights into the decision, noting long-standing concerns regarding Church & Dwight’s Evergreen OSG target.
Lieberman pointed out that during last year’s analyst day, Church & Dwight raised their Evergreen OSG target to +4%, which was seen as a negative sign in the Staples sector. The concern at that time was more long-term, but as the year progressed, it became more immediate due to a slowdown in category growth. Church & Dwight’s OSG is expected to be below its target range, with the company attributing this to weak consumer dynamics.
The analyst also questioned when Church & Dwight would start to see benefits from a weaker consumer environment, which is anticipated due to the company’s value-oriented product portfolio. Despite these issues, Lieberman acknowledged positive developments, such as a more comprehensive strategy for international markets discussed at this year’s meeting. This strategy could potentially enhance Church & Dwight’s ability to expand through acquisitions abroad.
Additionally, Lieberman mentioned that the small SPD business appears to be improving, which could lead to more stable trends in that segment.
Church & Dwight Co., Inc., known for its household and personal care products, has been facing challenges in its operational growth strategy, as indicated by the analyst’s commentary. The updated price target reflects a nuanced view of the company’s prospects, balancing persistent concerns with recent strategic initiatives that could favor the company’s international performance and stability in specific business areas.
In other recent news, Church & Dwight Co., Inc. reported its fourth quarter earnings, meeting analyst expectations, with revenues slightly exceeding estimates. The company’s Q4 adjusted earnings per share were at $0.77, aligning with consensus, and revenues rose 3.5% year-over-year to $1.58 billion, surpassing analyst projections of $1.57 billion. For the full year 2024, the company reported adjusted earnings of $3.44 per share on revenues of $6.11 billion.
Furthermore, Church & Dwight provided guidance for 2025, which was largely consistent with forecasts, projecting organic sales growth of 3-4% and adjusted earnings per share growth of 7-8%. However, the company’s first quarter guidance for 2025 fell short of expectations, forecasting an adjusted EPS of $0.90, a 6% year-over-year decrease, and below the $0.98 consensus.
Church & Dwight also anticipates persistently high input costs in 2025 but plans to counterbalance this with a favorable product mix, increased volumes, and productivity gains. The company also indicated its marketing spend is expected to exceed 11% of sales as it continues to invest in its brands. These are some of the latest developments for the company.
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