Update shared on27 Aug 2025
Fair value Decreased 3.24%Clorox’s consensus price target was revised down to $135.06 as soft consumption data, ERP-related volatility, and weak guidance have undermined near-term sales and earnings visibility.
Analyst Commentary
- Recent soft consumption data signals weakened demand, prompting concern over short-term sales trends.
- Bullish analysts note that the upcoming U.S. ERP system rollout and related shipping timing will create unpredictable swings in operating leverage, making near-term results hard to model.
- Guidance is expected to point to a 2-4% organic sales decline and a low-teens percentage drop in FY26 EPS, necessitating downward revisions to consensus estimates.
- Visibility on consumption improvement remains low, leading to skepticism around potential multiple expansion.
- Bearish analysts believe management and investors will need to reset their expectations until clearer demand trends and operational stability emerge.
What's in the News
- Clorox has filed a lawsuit against IT provider Cognizant, alleging that a 2023 cyberattack was enabled after Cognizant staff provided hackers with employee credentials following a simple request, highlighting significant lapses in cybersecurity (Reuters).
- The company issued FY26 guidance projecting net sales to decline 6%-10% year-over-year, organic sales down 5%-9%, gross margin down 50-100 bps, and diluted EPS between $5.60 and $5.95, reflecting a 9%-14% decrease; guidance incorporates a negative impact from the reversal of prior year ERP transition shipments.
- Clorox increased its quarterly dividend to $1.24 per share, payable August 29, 2025, continuing its record of regular dividend growth.
- The company completed repurchasing 565,378 shares for $75 million in Q2 2025, concluding the buyback program announced in May 2018, with a total of 8,066,223 shares repurchased (6.39% of shares outstanding) for $1.28 billion.
- Clorox has been reconstituted into multiple value-focused indices (Russell 1000, 3000, Midcap, and associated Value indices) while being dropped from various growth indices during the latest Russell rebalancing.
Valuation Changes
Summary of Valuation Changes for Clorox
- The Consensus Analyst Price Target has fallen slightly from $138.06 to $135.06.
- The Future P/E for Clorox has fallen slightly from 21.70x to 21.22x.
- The Net Profit Margin for Clorox remained effectively unchanged, at 12.74%.
Disclaimer
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