Jefferies Upgrades Clorox Stock to Buy, Sets New Price Target at $187
On Tuesday, Jefferies upgraded Clorox (NYSE: CLX) stock to Buy from Hold, with a new price target set at $187, an increase from the previous $174. The firm highlighted a positive outlook for the company's future performance, anticipating a return to its historic growth and profitability levels.
Clorox, known for its cleaning and disinfectant products, has faced challenges recently, but Jefferies predicts a turnaround. The firm expects Clorox to reclaim its position as a leader in economic profit growth and return on capital among its peers. This performance has historically given Clorox a valuation premium of around 30% over its competitors.
The upgrade is based on improving top-line growth and potential for increased operating leverage, signaling Clorox's path to recovery. Jefferies also provided new earnings per share (EPS) estimates for fiscal years 2025 to 2028, projecting an 8% compound annual growth rate (CAGR) that surpasses the consensus by 6%.
The revised price target of $187 reflects Jefferies' confidence in Clorox's potential for growth and strong return on capital. The upgrade to Buy represents a significant shift in the firm's assessment of Clorox's stock performance potential.
In addition to the upgrade, Clorox has finalized the sale of its Better Health Vitamins, Minerals, and Supplements business and reported margin expansion for the seventh consecutive quarter. Analysts have adjusted their price targets for Clorox, citing the company's ability to regain market share and deliver on sales growth.
CloroxPro has expanded its EcoClean line with plant-based Disinfecting Wipes, showing the company's commitment to sustainability. The company aims for 20-25% sales growth in the first quarter and plans to return to pre-pandemic gross margins.
In summary, Jefferies' bullish outlook on Clorox is supported by key metrics and insights from InvestingPro. Clorox's market cap of $20.18 billion, consistent dividend payments for 54 years, and recent performance indicate a strong potential for growth. Investors can leverage InvestingPro's tips for a deeper analysis of Clorox's investment potential post-upgrade.
Analysis:
- Jefferies upgraded Clorox stock to Buy from Hold, setting a new price target at $187.
- The firm predicts a return to historic growth and profitability levels for Clorox.
- Clorox's recent strategic moves and analyst adjustments indicate a renewed focus on growth and recovery.
- Investors can consider Clorox's strong financial health and market performance for potential investment opportunities.