Market Overview

With Obstacles To Growth In Sight, Argus Downgrades Clorox

Share:
With Obstacles To Growth In Sight, Argus Downgrades Clorox
Related CLX
A Few Key Takeaways From Clorox's Analyst Presentation
Pro: Consumer Goods Stocks Surging In 'Clear Change' In Market Leadership
John And Jane's October Dividend Increases And Income Tracker - Taxable Account (Seeking Alpha)

Margin pressures and private-label competition could impede growth at Clorox Co (NYSE: CLX), according to Argus. 

The Analyst

Argus analyst John Staszak downgraded shares of Clorox from Buy to Hold.

The Thesis

Clorox could see weak organic growth despite benefiting from low-cost operations and strong market share, Staszak said in a Thursday note. (See the analyst's track record here.) 

The analyst said he projects few near-term catalysts for Clorox. 

Helped by a 61-cent-per-share benefit from the recently signed Tax Cuts and Jobs Act, Clorox reported above-consensus EPS for its fiscal second quarter Feb. 2, Staszak said. Citing the lower effective tax rate, Clorox raised its 2018 EPS estimate from a range of $5.47-$5.67 to $6.17-$6.37, the analyst said. The revenue growth guidance was maintained at 1-3 percent.

Argus raised its earnings estimates for 2018 from $5.75 to $6.25, and for 2019 from $6.10 to $6.60.

"Clorox pays a dividend with a yield of about 2.6 percent  and is part of the S&P "Dividend Aristocrats" group — companies that have increased their dividends every year for at least 25 years," Staszak said. 

Clorox shares are fairly valued, with its stable, diverse operations and consistent dividend growth adequately reflected in the current stock price, according to Argus. The firm said it could consider returning the stock to its Buy list if organic growth accelerates and input costs moderate more than expected. 

The Price Action

Clorox shares are up about 1.6 percent over the past year.

Related Links:

Oppenheimer: Waterpik, Arm & Hammer Owner Church & Dwight Well-Positioned In Retail

Morgan Stanley Catches Flack For Colgate-Palmolive Upgrade

Latest Ratings for CLX

DateFirmActionFromTo
Dec 2018Wells FargoMaintainsMarket PerformMarket Perform
Nov 2018CitigroupMaintainsNeutralNeutral
Nov 2018CitigroupMaintainsNeutralNeutral

View More Analyst Ratings for CLX
View the Latest Analyst Ratings

Posted-In: Argus John StaszakAnalyst Color Downgrades Analyst Ratings Best of Benzinga

 

Related Articles (CLX)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
MOSJP MorganDowngrades33.0
BACKeefe Bruyette & WoodsDowngrades29.0
AMTMorgan StanleyDowngrades170.0
EBAYMorgan StanleyDowngrades33.0
UNITMorgan StanleyDowngrades16.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

Aerohive Networks' Earnings Preview

Citron's Andrew Left Sells Twitter Stake: 'Congrats To Them'