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On Tuesday, Jefferies analyst Kaumil Gajrawala adjusted the price target for Clorox shares, listed on (NYSE:CLX), to $167 from the previous $177, while reaffirming a Buy rating on the stock. According to InvestingPro data, the stock is currently trading below its Fair Value, despite a challenging year-to-date performance of -13.39%. In his commentary, Gajrawala noted the challenging environment for the Home and Personal Care (HPC) sector this earnings season, which also impacted Clorox with a miss on both top-line revenue and earnings per share.
Clorox, known for its cleaning and disinfecting products, has faced the same volatile conditions that have troubled the broader HPC sector. The company maintains a GOOD Financial Health score of 2.72 on InvestingPro, with a moderate debt level and consistent dividend payments for 55 consecutive years. Despite this, the company’s fiscal year 2025 outlook, which ends in June, is still expected to remain on track. Gajrawala expressed caution, stating that he will be closely monitoring the company’s performance following the launch of its Enterprise Resource Planning (ERP) system.
Looking ahead to fiscal year 2026, Gajrawala suggests that top-line growth may be more challenging for Clorox to achieve. He believes that the company will need to rely on productivity savings and operating expense leverage in order to drive any potential upside.
The adjustment in Clorox’s price target follows the company’s recent earnings report, which did not meet analysts’ expectations. Despite the reduction in the price target, the analyst’s decision to maintain a Buy rating indicates a continued positive outlook on the company’s stock performance moving forward.
In other recent news, Clorox Company reported fiscal third-quarter earnings that did not meet analysts’ expectations. The company posted earnings per share (EPS) of $1.45, falling short of the consensus estimate of $1.57. Organic sales declined by 2% year-over-year, contrary to projections of flat growth, due to reduced consumer demand and retailer destocking. Despite these challenges, Clorox’s gross margin improved by 240 basis points, reaching 44.6%, surpassing expectations. Clorox also adjusted its organic sales growth forecast for the fiscal year 2025 to 4-5%, down from the previous range of 4-7%.
Analysts have reacted to these developments with various adjustments. Raymond (NSE:RYMD) James maintained a Market Perform rating, while Wells Fargo (NYSE:WFC) reduced its price target from $145 to $142, keeping an Equal Weight rating. JPMorgan also lowered its price target from $151 to $144, maintaining a Neutral rating. Evercore ISI reduced its price target from $150 to $140, citing an Underperform rating, and Goldman Sachs cut its price target to $134, maintaining a Sell rating. These firms cited ongoing market challenges and competitive pressures as reasons for their cautious outlooks.
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