On Friday, Citi updated its outlook on Clorox (NYSE: NYSE:CLX) stock, increasing the price target to $170 from the previous $165 while maintaining a Neutral rating. The adjustment follows a company-organized sell-side meeting in New York City attended by Citi, where discussions with Clorox's CEO Linda Rendle and CFO Kevin Jacobsen took place.
The firm's analyst reported a positive perspective on Clorox's ability to regain shelf space and market share after the challenges posed by a past cyberattack. This viewpoint is supported by the company's conservative guidance for the first quarter of fiscal year 2025, which was previously highlighted by Citi.
Clorox's management also provided insights into the current U.S. consumer environment and the intensifying promotional competition in the household and personal care (HPC) sector.
Recent scanner data, ending August 24, indicates that Clorox's market performance has stabilized, showing flat trends after a period of decline. With easier comparisons expected in the upcoming three data release cycles, the analyst reiterated a short-term positive view on Clorox.
Despite the price target increase, Citi's stance remains neutral, taking into account that Clorox's stock has already experienced a significant uptick, rising approximately 23% over the past two months. The firm's revised price target reflects their updated expectations for the company's stock performance in the near future.
In other recent news, Clorox has been the focus of financial firms Jefferies and Citi, both of which have raised their price targets for the company. Jefferies increased its target to $174 from $151, while Citi raised its own to $165 from $145, both maintaining their respective Hold and Neutral stances. This comes after Clorox reported its seventh consecutive quarter of margin expansion and aims for a 20-25% sales growth in the first quarter of the fiscal year.
Clorox has also been making strides in its product lines, as evidenced by CloroxPro's expansion of the Clorox EcoClean line with the introduction of plant-based Disinfecting Wipes. These eco-friendly wipes are designed to combat 99.9% of germs, including common cold, flu viruses, norovirus, and COVID-19.
Furthermore, Clorox has shown resilience in the face of challenges, including a cyberattack that impacted its operations. Despite these hurdles, the company has managed to maintain stable organic sales and has detailed strategies to tackle anticipated consumer pressures and competitive activity in fiscal year 2025. These recent developments underscore Clorox's commitment to growth and recovery.
InvestingPro Insights
Following Citi's updated outlook on Clorox (NYSE: CLX), real-time data and insights from InvestingPro provide a deeper look into the company's financial health and market performance. Clorox's market capitalization stands at a robust $20.41 billion, though it's trading at a high P/E ratio of 73.05, which suggests a premium valuation relative to current earnings. However, the adjusted P/E ratio for the last twelve months as of Q4 2024 is more favorable at 34.15, indicating potential for near-term earnings growth.
InvestingPro Tips highlight that Clorox has a longstanding history of raising dividends, now for 54 consecutive years, which may appeal to income-focused investors. Additionally, with 6 analysts having revised their earnings upwards for the upcoming period, there is an optimistic outlook on the company's profitability. Clorox's revenue for the last twelve months as of Q4 2024 is reported at $7.093 billion, with a gross profit margin of 43.21%, reinforcing the company's ability to maintain profitability despite market fluctuations.
Clorox's stock performance also shows a strong return over the last month, with a 16.06% increase, and an impressive 25.51% over the last three months. This aligns with Citi's recognition of the company's market stabilization and potential for growth in the short term. For investors seeking more detailed analysis and additional insights, InvestingPro offers a total of 15 tips on Clorox, available at https://www.investing.com/pro/CLX.
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