On Wednesday, TD Cowen adjusted its stance on Clorox (NYSE: NYSE:CLX), upgrading the stock from Sell to Hold and increasing the price target to $170 from $155. The analyst at TD Cowen cited a conservative fiscal year 2025 guidance by the company and a stronger recovery following the cyber-attack in August 2023.
This optimistic outlook is based on Clorox's potential to exceed earnings expectations and make strategic investments, which may favorably position the stock compared to its home and personal care (HPC) industry peers.
The analyst highlighted that the sequential improvement observed post the cyber-attack incident suggests that the company's FY25 guidance may be understated. This situation provides Clorox's management with the flexibility to potentially deliver more earnings per share (EPS) beats and upward revisions. Such a development could lead to a more favorable performance for Clorox's shares in the near term.
Clorox's revised guidance and the subsequent upgrade by TD Cowen indicate a shift in the company's outlook. The analyst believes that these positive factors, including the ability for further investment, bode well for Clorox's stock. This is particularly relevant when compared to its HPC peers, who may be experiencing slowing price momentum and increased competition.
The price target adjustment to $170 reflects the analyst's reassessment of Clorox's value and prospects. The upgrade to a Hold rating suggests that the stock may have reached a valuation that more accurately reflects its current and anticipated performance, given the recent improvements and conservative guidance.
Clorox's recovery trajectory and strategic position in the market are now being viewed with a more optimistic lens by TD Cowen, as the company prepares to navigate the competitive landscape and leverage its recent progress to potentially enhance shareholder value.
InvestingPro Insights
Clorox's recent upgrade by TD Cowen aligns with several positive indicators highlighted by InvestingPro data and tips. The company's market cap stands at $20.1 billion, reflecting its significant presence in the consumer goods sector. InvestingPro Tips reveal that Clorox has raised its dividend for 48 consecutive years, demonstrating a strong commitment to shareholder returns. This consistent dividend growth, coupled with a current dividend yield of 3.0%, may appeal to income-focused investors.
The company's financial performance also shows promise, with revenue growth of 6.17% over the last twelve months and a robust EBITDA growth of 42.81% in the same period. These figures support TD Cowen's optimistic outlook on Clorox's potential to exceed earnings expectations.
Additionally, Clorox's stock has shown strong momentum, with a 30.13% total return over the past year and a 15.25% return in the last three months. This performance aligns with the analyst's view that Clorox may be favorably positioned compared to its peers.
For investors seeking more comprehensive analysis, InvestingPro offers 11 additional tips on Clorox, providing deeper insights into the company's financial health and market position.
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