Church & Dwight (CHD) Valuation in Focus as Growth Slows and Costs Outpace Revenue

Church & Dwight (CHD) has come under the microscope lately as it faces sluggish organic growth and costs growing faster than revenues. As a result, the company may need to rethink its strategy or consider acquisitions to boost momentum.

See our latest analysis for Church & Dwight.

Church & Dwight has seen its share price slip to $87.25, with a year-to-date price return of -15.98% reflecting investors’ skepticism as organic sales growth loses steam and rising costs pressure margins. While the three-year total shareholder return remains positive at 25.21%, recent price action suggests that momentum is fading and the market is reassessing the company's growth trajectory.

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This backdrop of operational headwinds and market skepticism raises a crucial question for investors: is Church & Dwight’s current share price a sign of undervaluation, or is the market already factoring in all future growth prospects?

Most Popular Narrative: 11.4% Undervalued

Church & Dwight’s most-followed valuation narrative puts fair value noticeably ahead of the last close. The market, however, remains skeptical, creating a rare disconnect between popular valuation models and recent price action. Here’s a preview of what’s fueling that divergence and why so many believe the shares could have more to run.

The strong trajectory of e-commerce and online sales, with Church & Dwight's online channel now accounting for 23% of global sales and driving category growth (notably with Touchland's success on Amazon and other platforms), positions the company to benefit from higher-margin, direct-to-consumer sales and increased market reach. This is likely to support revenue growth and margin expansion in future years.

Read the complete narrative.

What bold formula justifies this higher fair value? Behind the headline is an aggressive margin expansion forecast fueled by a digital push and strategic innovation bets. Want to know which surprising business levers are assumed to change fastest in the next few years? Dive in to see the key projections the narrative is built on.

Result: Fair Value of $98.42 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, any continued weakness in Church & Dwight's vitamin business or higher input costs could quickly challenge even the most optimistic growth assumptions.

Find out about the key risks to this Church & Dwight narrative.

Another View: Price Multiples Signal Caution

While the consensus narrative points to Church & Dwight being undervalued, traditional price-to-earnings comparisons tell a different story. The company trades at 40.5 times earnings, well above industry peers at 18.3 times and also higher than its fair ratio of 22.4. This wide gap means the market currently prices in much stronger growth or resilience than the sector average, raising the question: is that optimism justified or is risk being overlooked?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Church & Dwight Narrative

If you see things differently or want to challenge the popular thinking, the data is yours to explore and interpret. Put together your own perspective in just a few minutes with our Do it your way.

A great starting point for your Church & Dwight research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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