TD Cowen holds Church & Dwight stock at $100 target

On Tuesday, TD Cowen maintained its Hold rating on Church & Dwight Co. Inc. (NYSE:CHD) with a steady price target of $100.00. The firm’s analyst highlighted the company’s recent move to acquire Touchland, a fast-growing hand sanitizer brand. Church & Dwight’s acquisition strategy is seen as a return to its core competence in smaller, additive mergers and acquisitions (M&A).

Church & Dwight has entered into a definitive agreement to purchase Touchland for an upfront payment of $700 million, complemented by a potential $180 million earn-out based on the achievement of 2025 sales targets. The transaction values Touchland at an enterprise value (EV) to EBITDA multiple of 16.0x, which is slightly below Church & Dwight’s own multiple of 16.9x.

The acquisition of Touchland, which reported last twelve months (L12M) sales of $130 million—representing a 2% increase to Church & Dwight’s sales—and an EBITDA of $55 million for a substantial 42% margin compared to Church & Dwight’s 23%, is expected to positively impact the company’s gross margin. However, it is anticipated to be neutral to the fiscal year 2025 earnings per share (EPS) due to transition and acquisition-related expenses.

Looking further ahead, the acquisition is projected to be 3% accretive to Church & Dwight’s cash earnings in 2026. The completion of the acquisition is expected in the second quarter. The purchase will be paid for with a combination of cash and restricted stock. Concerns were raised by the analyst regarding the long-term growth potential in the hand sanitizer category, noting the modest 3% growth post-pandemic and the low barriers to entry in the market.

In other recent news, Church & Dwight Co. Inc. has announced a significant acquisition, agreeing to purchase the hand sanitizer brand Touchland for $700 million, with the potential for an additional $180 million based on 2025 net sales. This acquisition aligns with Church & Dwight’s strategy to expand its portfolio with brands appealing to younger demographics. The deal is expected to be neutral to the company’s earnings per share by 2025, with plans to leverage its capabilities to accelerate Touchland’s growth in select international markets. Meanwhile, Jefferies analyst Kaumil Gajrawala adjusted the company’s price target to $106, maintaining a Hold rating, after noting the strategic fit of the Touchland acquisition.

Additionally, TD Cowen downgraded Church & Dwight’s stock from Buy to Hold, reducing the price target to $100, citing a slowdown in business growth and concerns over the company’s valuation premium compared to its peers. UBS also adjusted its price target for the company to $102, following lower-than-expected sales and gross margins in the first quarter, despite surpassing EPS expectations. The company’s revised guidance for 2025 reflects concerns about slower category growth and the impact of tariffs. Jefferies further reduced its price target to $100, maintaining a Hold rating due to the challenging outlook for 2025 and anticipated negative earnings revisions. Church & Dwight’s management continues to focus on improving volumes and productivity amidst these economic challenges.

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