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On Friday, UBS analyst Peter Grom adjusted the price target for Church & Dwight Co. Inc. (NYSE:CHD) shares to $102.00, down from the previous $110.00, while maintaining a Neutral rating on the stock. The revision followed Church & Dwight’s first-quarter earnings report, which, despite surpassing earnings per share (EPS) expectations, revealed lower sales and gross margins. The company’s full-year 2025 guidance was also reduced, reflecting concerns about slower category growth and the impact of tariffs.
The stock ended the trading day lower, dropping 7% compared to a 0.9% decline in the Consumer Staples Select Sector SPDR Fund (XLP). The decrease was attributed to the larger-than-anticipated cut in guidance, which was more significant than most analysts had predicted. The stock is now trading near its 52-week low of $91.77, with a market capitalization of $22.75 billion. Despite recent volatility, InvestingPro analysis shows the company maintains strong financial health with a current ratio of 1.7 and has consistently paid dividends for 51 consecutive years.
UBS noted that while the new guidance might include some conservative estimates, as is common with new management in the Consumer Packaged Goods (CPG) industry, the company’s outlook remains heavily reliant on improvements in the second half of the year. The analyst pointed out that the current situation, with various factors affecting consumer demand, cost pressures, and tariffs, makes it challenging to be confident that the risks have been fully accounted for in the guidance.
Church & Dwight’s stock continues to trade at approximately 27 times UBS’s revised next twelve months (NTM) EPS estimates. This valuation is a 40%+ premium compared to its Home and Personal Care (HPC) peers, versus the long-term historical average premium of 33%. Given the uncertainties, UBS suggested that investors might adopt a "wait and see" approach towards the stock.
In other recent news, Church & Dwight reported its first-quarter 2025 earnings, revealing a mixed performance. The company surpassed earnings per share (EPS) expectations with an adjusted EPS of $0.91, slightly above the forecast of $0.90. However, it fell short on revenue, reporting $1.47 billion against the anticipated $1.51 billion. This revenue miss led to a cautious market reaction, with analysts and investors closely monitoring the company’s strategic adjustments. Jefferies analyst Kaumil Gajrawala revised the stock’s price target to $100, down from $108, maintaining a Hold rating due to the company’s challenging outlook for 2025. Church & Dwight is facing headwinds such as tariff impacts and softening consumer demand, which have prompted the company to pursue strategic alternatives for certain product lines. Despite these challenges, the company has gained market share in several key brands and continues to focus on innovation and strategic realignment to drive growth. The management remains committed to navigating these hurdles by enhancing productivity and capitalizing on market improvements.
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