Goldman Sees Church & Dwight 'Fully Valued,' Downgrades To Neutral

In a report published Monday, analysts at Goldman Sachs downgraded Church & Dwight Co., Inc. (NYSE: CHD) from Buy to Neutral. The price target was also lowered from $89 to $88."Despite an anticipated oil tailwind and near-term domestic safety benefits, we step off our Buy rating as CHD's new product cycle plays out, soaring deal multiples reduce M&A probability, absolute and sector-relative valuations appear stretched and persistence of organic out-performance comes into question as new competitive threats emerge in laundry," the analysts explained.While the company has successfully rolled out various innovations to that drove its best-in-class organic growth profile, the benefits of the roll out are likely to lapse soon. The analysts had expected the end of the laundry price war witnessed in 2014 to mitigate the lapsing benefits. However, the analysts now see risks of the price war being rekindled in 2015.According to Goldman Sachs, "Oil and oil-based input costs should provide a substantial tailwind to margins going forward, but we think this is well understood. While this mid-cap consolidator has a history of meaningfully accretive M&A, recent deal multiples have been high relative to the past and lack of success to-date is beginning to raise questions."