How Weak 2026 Outlook and Digital Bet at Clorox (CLX) Has Changed Its Investment Story

• Recently, Clorox outlined weak expectations for fiscal 2026, projecting a 6–10% sales decline and 21% earnings per share drop, while emphasizing its ongoing digital transformation and product innovation efforts as longer-term growth drivers.
• An interesting angle is that investors appear focused on the company’s multi-year digital overhaul and new product pipeline, viewing these initiatives as potential value creators despite the near-term pressure on performance.
• With management highlighting that ERP and digital initiatives may take 1–2 years to show benefits, we’ll now examine how this shapes Clorox’s broader investment narrative.

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Clorox Investment Narrative Recap

To own Clorox today, you need to believe its ERP overhaul and product innovation can eventually offset weak demand and category pressure, even as near term earnings remain under strain. The latest FY26 guide simply reinforces that the key near term catalyst is successful execution of the digital and ERP transition, while the biggest risk is that sluggish category growth and intense price competition persist longer than expected, muting any benefit from these investments.

The most relevant recent announcement here is Clorox’s FY2026 outlook, which builds in about US$0.90 of EPS headwind from ERP transition reversals. This explicitly links near term financial pressure to the same digital and systems investments that are expected to support productivity, margin improvement and a stronger innovation engine in later years, making ERP execution the pivot point between current weakness and any future recovery in performance.

But while the ERP rollout may unlock efficiencies over time, investors should also be aware that...

Read the full narrative on Clorox (it's free!)

Clorox's narrative projects $7.0 billion revenue and $881.8 million earnings by 2028. This assumes a 0.4% yearly revenue decline and an earnings increase of about $71.8 million from $810.0 million today.

Uncover how Clorox's forecasts yield a $124.59 fair value, a 23% upside to its current price.

Exploring Other Perspectives

Six Simply Wall St Community fair value estimates for Clorox range from US$98.22 to US$213.56, highlighting very different views on upside. Against that backdrop, Clorox’s own outlook for a 6 percent to 10 percent sales decline and a 21 percent EPS drop in FY26 shows why you may want to compare several perspectives before deciding how its risks and digital transformation potential could influence long term performance.

Explore 6 other fair value estimates on Clorox - why the stock might be worth over 2x more than the current price!

Build Your Own Clorox Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Clorox research is our analysis highlighting 5 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Clorox research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Clorox's overall financial health at a glance.

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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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