Jefferies Upgrades Clorox Stock to Buy with New Price Target of $187
On Tuesday, Jefferies upgraded Clorox (NYSE: CLX) stock to Buy from Hold, setting a new price target of $187, up from the previous $174. The firm foresees a positive outlook for Clorox's future performance, expecting a return to its historical growth and profitability levels.
Clorox, a renowned brand for cleaning and disinfectant products, has faced challenges recently, but Jefferies anticipates a turnaround. The firm projects Clorox to regain its position as a leader in economic profit growth and return on capital within its industry. Historically, this performance has led to Clorox commanding a valuation premium of around 30% over its competitors.
The upgrade is driven by improving top-line growth and the potential for increased operating leverage, indicating Clorox's path to recovery. Jefferies has also provided new earnings per share (EPS) estimates for fiscal years 2025 to 2028, projecting an 8% compound annual growth rate (CAGR), surpassing the consensus by 6%.
The revised price target of $187 reflects Jefferies' confidence in Clorox's ability to achieve peer-leading growth and a return to strong return on capital. The upgrade signifies a significant shift in the firm's assessment of Clorox's stock performance potential.
In addition, Clorox has recently sold its Better Health Vitamins, Minerals, and Supplements business to Piping Rock Health Products as part of its strategy for sustainable growth. The company has also reported margin expansion for the seventh consecutive quarter.
Analysts from Exane BNP Paribas, Jefferies, and Citi have adjusted their price targets for Clorox, citing the company's potential to regain market share and deliver on sales growth guidance. CloroxPro has expanded its EcoClean line with plant-based Disinfecting Wipes, indicating a commitment to sustainability.
In summary, Clorox's recent strategic moves and analyst adjustments paint a mixed picture of confidence and caution regarding the company's future. However, with the support of Jefferies' optimistic outlook and key metrics from InvestingPro, Clorox's potential for growth and recovery seems promising.
Analysis:
- Jefferies upgraded Clorox stock to Buy with a new price target of $187, reflecting confidence in the company's future performance.
- Clorox is expected to return to its historical growth and profitability levels, with indications of improving top-line growth and operating leverage.
- Recent strategic moves, such as the sale of a business segment and product expansions, demonstrate Clorox's commitment to sustainable growth.
- Analysts have adjusted their price targets for Clorox, citing the company's potential for market share recovery and sales growth.
- Clorox's recent performance metrics show promise, with a strong market capitalization and a history of dividend payments, supporting its position as a strong performer in the consumer goods sector.
