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On Monday, Church & Dwight Co. Inc. (NYSE:CHD) stock rating was upgraded from Sector Perform to Outperform by analysts at RBC Capital Markets, with a revised price target of $114, up from $100. The upgrade followed a period of underperformance for the company’s shares, which was attributed to a variety of factors including destocking, slower category growth, and the impact of tariffs.
RBC Capital Markets’ decision comes after engaging with the management team at Church & Dwight, including the CEO and the new CFO. The firm expressed renewed confidence in the company’s guidance, which they believe now adequately reflects the challenges posed by the current market environment.
The analysts at RBC are also optimistic about Church & Dwight’s recent acquisition of Touchland, a brand known for its effective and differentiated products, as well as its potential for distribution expansion and strong consumer loyalty. This acquisition is seen as a positive move that could contribute to Church & Dwight’s growth and market position.
In their commentary, RBC Capital Markets highlighted the factors that led to their positive outlook, stating, "After spending time with Church & Dwight management, we have renewed confidence that the current guide adequately reflects the challenges of the current environment. We are also bullish on the acquisition of Touchland given its product efficacy, differentiation, distribution opportunities and loyal consumer base."
The new price target of $114 represents an increase from the previous target of $100, indicating a potential upside for investors based on RBC Capital Markets’ analysis. The upgrade to Outperform suggests that the analysts now see Church & Dwight’s stock as likely to outperform the average return of the stocks in the analyst’s coverage universe.
In other recent news, Church & Dwight Co. Inc. announced its acquisition of Touchland, a prominent hand sanitizer brand, for $700 million, with the potential for an additional $180 million contingent on 2025 sales targets. This acquisition, expected to close in the second quarter, positions Touchland as Church & Dwight’s eighth "power brand" and is projected to be neutral to the company’s 2025 earnings per share due to transition costs. Despite a challenging consumer environment, analysts from Goldman Sachs maintain a Buy rating for Church & Dwight, citing the acquisition as a strategic move for growth. Jefferies also adjusted its price target for the company to $106, acknowledging the acquisition’s potential to enhance the company’s portfolio and appeal to younger demographics.
However, TD Cowen downgraded Church & Dwight from Buy to Hold, lowering the price target from $117 to $100, reflecting concerns over the company’s growth prospects compared to peers. The firm noted the company’s revised guidance for 2025 and its limited presence in higher-growth international markets as factors influencing the downgrade. While the acquisition of Touchland is seen as a return to Church & Dwight’s core competence in smaller mergers, TD Cowen highlighted concerns about the long-term growth potential in the hand sanitizer category. The transaction values Touchland at an enterprise value to EBITDA multiple slightly below Church & Dwight’s own, suggesting a strategic fit despite current market challenges.
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