Clorox (CLX) Valuation in Focus After ERP Disruption and Sales Guidance Cut

Clorox (CLX) drew plenty of attention after reporting weak first-quarter earnings and a sharper sales outlook. The recent ERP system upgrade disrupted operations, which caused market share setbacks and a meaningful dip in both sales and profit margins.

See our latest analysis for Clorox.

Clorox’s share price has lost significant ground this year, with a year-to-date share price return of -32.69% and a 1-year total shareholder return of -30.54%. Recent news, such as ERP system hiccups, a dip in earnings, leadership changes, and ongoing buybacks, has done little to rebuild momentum so far. Investors appear to be reconsidering the company's near-term growth prospects in light of continued margin pressure.

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Given the drop in Clorox's share price and ongoing operational challenges, the key question for investors is whether the worst is already reflected in the stock's valuation or if further downside risks remain. Is this a chance to buy a leading consumer brand at a discount, or is the market already pricing in a slow recovery ahead?

Most Popular Narrative: 12.7% Undervalued

The most widely followed narrative places Clorox’s fair value well above its last close, suggesting that the current share price may not fully reflect the company’s long-term profit recovery and operational improvements.

The full-scale implementation of a modern ERP system is expected to drive long-term operational efficiencies, improving supply chain visibility, speeding up innovation cycles, and reducing structural costs. These changes should support margin expansion and sustained earnings growth once short-term transition noise normalizes.

Read the complete narrative.

What behind-the-scenes financial moves and strategic pivots are powering this narrative? There is one major quantitative shift that could reset Clorox’s profit trajectory for years. Find out what insiders believe makes this valuation possible and why every detail counts if you’re watching this stock’s comeback story.

Result: Fair Value of $124.76 (UNDERVALUED)

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

However, persistent category weakness or stubborn input cost inflation could still derail Clorox’s recovery, casting doubt on the optimistic price target narrative.

Find out about the key risks to this Clorox narrative.

Build Your Own Clorox Narrative

If you think the narrative might be missing something or want to dig into the numbers yourself, you can build your own story in minutes. Do it your way.

A great starting point for your Clorox research is our analysis highlighting 4 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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