Evaluating Clorox After Persistent Share Price Declines and Supply Chain Challenges in 2025

If you have Clorox on your watchlist and are wondering whether it is the right time to buy, hold, or move on, you are not alone. Navigating the world of legacy consumer brands can feel tricky, especially when so much of the market’s attention veers toward tech stocks or flashy growth stories. However, Clorox has a way of forcing investors to pay attention, particularly as its recent price swings highlight both opportunities and risks.

Over the last seven days, Clorox’s share price edged down by 0.4%, and it has muddled along with a 1.9% gain over the last thirty days. These moves are modest, but when you zoom out, the picture gets more interesting. The year-to-date return stands at -24.5%, and the past year presents a similar, downbeat story with a -21.6% drop. Stretch the timeline even further and the five-year loss expands to -33.1%. Yet, Clorox managed to deliver a 3.9% return for shareholders across the last three years. Some of this volatility is tied to shifting investor sentiment about household brands and the consumer staples sector in general, particularly amid evolving supply chain pressures and changing retail trends.

When it comes to value, Clorox stands out, at least by traditional standards. Out of six key undervaluation checks, it passes five, giving it a solid valuation score of 5. So, how do we make sense of these numbers? Let’s walk through the main methods for valuing Clorox’s stock, and by the end, we will dig even deeper to see if there is an edge beyond the usual approaches.

Why Clorox is lagging behind its peers

Approach 1: Clorox Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model is a popular valuation approach that estimates a company’s intrinsic value by projecting its future cash flows and then discounting those figures back to today’s dollars. This helps investors determine what a stock is truly worth based on the cash it is expected to generate down the road, rather than just relying on current earnings or market sentiment.

For Clorox, the latest reported Free Cash Flow sits at $763.8 million. Analyst estimates suggest that cash flow will gradually climb, reaching $1.12 billion by 2030. These projections include both recent analyst expectations covering the next five years and additional long-term figures extrapolated by Simply Wall St. Over the next decade, Clorox’s annual Free Cash Flow is predicted to see steady, moderate growth rather than dramatic spikes.

Using these inputs, the DCF analysis calculates an intrinsic fair value of $213.68 per share. With Clorox’s current market price at a 42.8% discount to this estimated value, the stock appears meaningfully undervalued using this method. That substantial margin gives a clear edge to buyers who are highly focused on long-term cash flows rather than short-term headlines.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Clorox.

Our Discounted Cash Flow (DCF) analysis suggests Clorox is undervalued by 42.8%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Clorox Price vs Earnings (PE)

The Price-to-Earnings (PE) ratio is one of the most common ways to value established, profitable companies like Clorox. It shows how much investors are willing to pay for each dollar of current earnings and provides a straightforward measure of market expectations. In general, companies with higher growth prospects or lower perceived risk command higher PE ratios. On the other hand, slower growth or greater risks usually mean a lower “normal” or “fair” multiple.

Clorox is currently trading at a PE ratio of 18.5x. For comparison, the industry average sits at 18.8x and the average among its household products peers is about 24.0x. While Clorox’s PE is slightly below both its industry and its peers, this does not automatically mean the stock is cheap. These simple averages can miss significant differences in profitability, size, and resilience within the sector.

This is where Simply Wall St’s “Fair Ratio” adds value. The Fair Ratio, which for Clorox is 20.0x, incorporates factors such as Clorox’s earnings growth outlook, profit margins, risk profile, and the broader market environment. This method delivers a more personalized benchmark than the industry average or a potentially unrepresentative peer group. In this case, Clorox’s PE is modestly below its Fair Ratio, suggesting that the shares trade at a slight discount to what would be justified based on the company’s fundamentals.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Clorox Narrative

Earlier, we alluded to a better way to understand valuation, so let’s introduce you to Narratives. A Narrative is your personal story and outlook for a company; it is where you connect your assumptions about Clorox’s future revenue, earnings, and profit margins with a fair value estimate, based on what you believe will drive its performance over time.

Simply Wall St’s Narratives tool, used by millions of investors and found on the Community page, makes this process easy and accessible. You set out your view, link it to a financial forecast, and the platform dynamically calculates a custom fair value for you, rather than relying only on a single analyst estimate or static model.

As new information like earnings or news comes in, each Narrative updates automatically. This helps you see exactly when the market price and your own fair value call are out of sync, so you can decide whether to buy, hold, or take profits based on your real beliefs, not just the headlines.

For example, some investors may base their Narrative for Clorox around a bullish price target of $166, betting on digital transformation and product innovation. Others might use a more cautious estimate of $115, focusing on risks such as cost pressures and competition. Your Narrative helps you make investment decisions with confidence, tailored to your outlook.

Do you think there's more to the story for Clorox? Create your own Narrative to let the Community know!

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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