Clorox Stock Discussion

Investors seem more bullish on Clorox than analysts, as indicated by its high P/S ratio. However, its high share price may not be justified by forecasted revenues, posing risks for shareholders and potential investors.

Clorox's accrual ratio and unusual items hint at conservative statutory earnings. Its underlying earnings potential is likely higher. Analysts are optimistic about its future profitability.

Deutsche Bank analyst Steve Powers raised his price target to $156 from $140 and maintained a Neutral rating. Barclays analyst Lauren Liberman expects 2024 earnings of $6.21 a share, 13% higher than the company's estimates, and raised her price target to $148 from $118 while maintaining an Underweight rating. BofA Securities analyst Anna Lizzul also raised her price target, to $160 from $150, while maintaining a Neutral rating.

The company's recovery from last year's cybersecurity attack is reflected in strong Q2 results. The updated full-year outlook shows confidence in H2 performance, despite unfavorable foreign-exchange rates.

Clorox outperformed analysts' earnings estimates, while Kimberly-Clark had a mixed quarter. Central Garden & Pet underperformed, and Procter & Gamble had a decent quarter. WD-40 impressed with the fastest revenue growth among peers.

Clorox, a mature business showing signs of aging, is experiencing a declining ROCE and steady capital employed. The rising ratio of current liabilities to total assets could pose new risks. Better investment opportunities might exist elsewhere.

Despite challenges like changing consumer behavior, high inflation, and extreme weather, household product stocks have remained resilient. Central Garden & Pet, Clorox, Spectrum Brands, Colgate-Palmolive, and Reynolds reported strong quarters.

BofA analysts question Kimberly-Clark's strategy to boost organic sales via price hikes due to economic constraints steering consumers to private labels. They remain hopeful for Clorox's recovery, despite possible mild recession in early 2024.