CHD Stock Fair Value Calculation – Citi Cuts Church & Dwight Valuation Over Optimism

☀️Trending News

Citi recently downgraded Church & DWight’s stock due to an overly optimistic assessment of the company. Church & Dwight ($NYSE:CHD) is an American manufacturer and distributor of household and personal care products, including many well-known brands such as Arm & Hammer, OxiClean, Xtra, Trojan, and First Response. Citi believes that the current stock valuation is drastically higher than what the company’s future growth can support, leading to the downgrade.

This decision comes in the wake of investor concerns that Church & Dwight may be underestimating risks to its business due to the economic effects of the pandemic. Citi has therefore opted to reduce the company’s valuation to a more cautious level in order to protect its investors from potential losses.

Price History

On Wednesday, CHURCH & DWIGHT Co., Inc. (NYSE:CHD) stock opened at $93.3 and closed at $95.0, up by 0.5% from its previous closing price of 94.5. The target cut was due to the fact that Citigroup feels that investors are overly optimistic about CHURCH & DWIGHT’s future prospects. The company is a leading producer of consumer and specialty products, including baking soda, laundry detergent, and pet food. Its brands are some of the most recognized in the market, such as ARM & HAMMER, TROJAN, and OXICLEAN. In recent years, CHURCH & DWIGHT has seen strong growth in its profits and revenues, especially in its international operations.

However, Citigroup believes that the stock’s current valuation may be too high, given the company’s recent performance and outlook for the future. The bank believes that CHURCH & DWIGHT’s valuation could face some headwinds in the near future due to weak consumer spending, competition from other consumer goods companies, and potential changes in international tax codes. Despite the downward revision of its price target, Citigroup analysts still believe that CHURCH & DWIGHT has a bright future ahead of it and is well positioned to capitalize on future growth opportunities. Investors will need to monitor the company’s progress closely to see if their optimism is justified. Live Quote…

About the Company

Income Snapshot

Below shows the total revenue, net income and net margin for CHD. More…

Cash Flow Snapshot

Below shows the cash from operations, investing and financing for CHD. More…

Balance Sheet Snapshot

Below shows the total assets, liabilities and book value per share for CHD. More…

Key Ratios Snapshot

Some of the financial key ratios for CHD are shown below. More…

Analysis – CHD Stock Fair Value Calculation

We at GoodWhale have conducted an analysis of CHURCH & DWIGHT’s financials and have concluded that the intrinsic value of their share is around $95.3, as determined by our proprietary Valuation Line. We believe that CHURCH & DWIGHT is currently being traded at a fair price of $95.0, which is in line with our findings. This price is a reflection of CHURCH & DWIGHT’s strong fundamentals and robust growth prospects. We believe that the CHURCH & DWIGHT share is an attractive long-term investment option for investors, and that they should consider buying the stock at current market prices. More…

Peers

In the cleaning and laundry products industry, there is intense competition between Church & Dwight Co Inc and its competitors Henkel AG & Co KGaA, Unilever PLC, and Clorox Co. Each company has its own unique strengths and weaknesses, and each is constantly trying to gain an edge over the others. The competition between these companies is fierce, and it is always changing.

– Henkel AG & Co KGaA ($LTS:0IZ8)

Henkel AG & Co KGaA is a German chemical and consumer goods company with a market cap of 26.6 billion as of 2022. The company has a return on equity of 4.84%. Henkel operates in three business segments: Laundry & Home Care, Beauty Care, and Adhesive Technologies. The company was founded in 1876 and is headquartered in Düsseldorf, Germany.

– Unilever PLC ($LSE:ULVR)

Unilever PLC is a British-Dutch transnational consumer goods company co-headquartered in London, England and Rotterdam, Netherlands. Its products include food, beverages, cleaning agents and personal care products. It is the world’s largest consumer goods company measured by 2012 revenue.

Unilever PLC has a market cap of 98.85B as of 2022 and a Return on Equity of 30.85%. The company’s strong market position and high ROE indicate that it is a well-established and profitable business. Unilever PLC’s product portfolio is diversified, which helps to insulate the company from downturns in any one particular product category. The company has a strong international presence, which gives it a competitive advantage in many markets.

– Clorox Co ($NYSE:CLX)

Clorox Co is a publicly traded company that manufactures and markets consumer and institutional products. The company has a market capitalization of 16.67 billion as of 2022 and a return on equity of 93.23%. Clorox’s products are sold in over 100 countries and include brand names such as Clorox, Formula 409, Glad, Kingsford, Pine-Sol, Liquid-Plumr, and Hidden Valley. The company has a long history of dividend growth and has increased its dividend for 42 consecutive years.

Summary

Investment analysts at Citi recently downgraded Church & Dwight due to the company’s overly high valuation. They noted that its current stock price does not reflect the company’s true potential, and that there is likely more room for growth in the future. Citi believes that investors should be careful when investing in Church & Dwight, as the current valuation is not warranted by its performance.

The analysts recommended a more conservative approach to evaluate the company and focus on its bottom line fundamentals. They concluded that Church & Dwight may be overvalued and that a more balanced approach is required to accurately assess its future growth.