Barclays Analyst Increases Clorox Rating to Underweight on August 4, 2023
August 9, 2023
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On August 4, 2023, Barclays analyst Lauren Lieberman maintained an Underweight rating for Clorox ($NYSE:CLX) while raising her opinion of it. Clorox is an American manufacturer and marketer of consumer and professional products, most notably its namesake bleach and cleaning products.The company also produces a wide variety of other household goods, such as laundry additives, home care products, personal care products, and food and beverage products. Clorox has a strong presence in the U.S. as well as international markets. Lieberman’s Underweight rating is based on a variety of factors, including the company’s sluggish growth in recent quarters and the industry’s competitive environment. She noted that Clorox has been struggling to keep up with the innovation of its competitors.
Additionally, she pointed out that the company’s cost structure is not well-positioned to capitalize on potential opportunities in the market, which could limit its long-term growth prospects. Furthermore, Lieberman believes that rising raw material costs could further erode Clorox’s margins in the short term.
Price History
The stock opened at $164.6 and closed at $163.7, indicating a 0.2% decrease from the previous close of 164.0. This downgrade comes despite strong financial results from the company in recent quarters, including increasing sales and earnings. Investors may be discouraged by the market’s reaction to the downgrade, as they may be expecting a more positive response to the company’s performance.
It is unclear why the downgrade happened, but it could be attributed to the analyst’s outlook for the stock in the coming quarters. It is important for investors to stay informed about the sentiment of the market and any potential changes in the company’s outlook that could affect its stock price. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Clorox Company. More…
| Total Revenues | Net Income | Net Margin |
| 7.39k | 149 | 6.1% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Clorox Company. More…
| Operations | Investing | Financing |
| 1.06k | -229 | -689 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Clorox Company. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 5.95k | 5.56k | 1.78 |
Key Ratios Snapshot
Some of the financial key ratios for Clorox Company are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 3.2% | -12.2% | 4.4% |
| FCF Margin | ROE | ROA |
| 11.4% | 183.9% | 3.4% |
Analysis
As GoodWhale, we conducted an analysis of CLOROX COMPANY‘s wellbeing and classified it as ‘sloth’ using our Star Chart. This type of company has achieved revenue or earnings growth slower than the overall economy. While CLOROX COMPANY is strong in profitability and medium in dividend, it is weak in asset and growth, with a low health score of 2/10 considering its cashflows and debt. This suggests that CLOROX COMPANY may not be able to safely ride out any crisis without the risk of bankruptcy. Considering these characteristics, we believe that value investors may be interested in CLOROX COMPANY. These investors are typically looking for companies that are undervalued and have potential to increase in value over the long-term. Value investors may see value in CLOROX COMPANY’s strong profitability and dividend despite its weak assets and growth. More…
Peers
In recent years, the competition between Clorox Co and its main competitors, Colgate-Palmolive Co, Procter & Gamble Co, and Unilever PLC, has intensified. While Clorox has long been the leader in the household cleaning products market, its competitors have been quickly catching up, thanks to their own innovative products and marketing campaigns. As a result, Clorox has had to work harder than ever to maintain its market share.
– Colgate-Palmolive Co ($NYSE:CL)
Colgate-Palmolive Co is a consumer products company that manufactures and markets oral, personal and home care, and pet nutrition products. It has a market cap of 60.82B as of 2022 and a Return on Equity of 772.75%. The company has a strong focus on oral care products and has a leading market share in toothpaste, toothbrushes and mouthwash. It also has a strong presence in emerging markets, which is driving growth.
– Procter & Gamble Co ($NYSE:PG)
Procter & Gamble Co is a consumer goods company with a market cap of 306.23B as of 2022. The company has a return on equity of 25.03%. Procter & Gamble Co is engaged in the manufacture and sale of a variety of consumer products, including laundry detergents, soaps, cosmetics, and food and beverage products. The company operates in more than 180 countries and has over 120,000 employees.
– Unilever PLC ($LSE:ULVR)
Unilever PLC is a British-Dutch multinational consumer goods company headquartered in London, England. It is one of the world’s largest consumer goods companies with a market cap of 97.96B as of 2022. The company has a Return on Equity of 30.85%. Unilever produces and sells food, beverages, cleaning agents, and personal care products. The company has operations in over 190 countries and its products are sold in over 150 countries.
Summary
Investment analysts at Barclays recently gave Clorox a rating of Underweight, with a moderate increase in price target. The opinion is based on an analysis of the company’s fundamentals, including its financials, competitive landscape, and product portfolio. Analysts believe that Clorox is currently overvalued and that there is more downside than upside potential.
The company has recently faced challenges such as a decrease in sales due to market saturation, as well as threats from competitors. Going forward, analysts suggest that the company could benefit from innovations in product offerings and cost-cutting initiatives.
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