'Share Weakness Across Key Categories': Analysts Weigh In On Clorox's Investor Day

Clorox Co CLX shares lost ground Thursday after the company cut its 2020 guidance at its investor day Wednesday.

The company cut its fiscal year 2020 earnings guidance from a range of $6.30-$6.50 per share to $6.05-$6.25, falling short of consensus estimates.

BofA Shaves $5 From Price Target

Ater a challenging fourth quarter and expectations for a tough 2020, the company unveiled a clear focus on how to fix wrongs and innovate to win with an increasingly diverse set of consumers and retailers, Bank of America Merrill Lynch analyst Olivia Tong said in a Thursday note.

“We see ESG and efficiency-related initiatives as fundamentally sound and management did address recent misfires and restoration plans for Kingsford head on. However, near term, we continue to see share weakness across key categories, increased reliance on cost saves to fuel growth, unfavorable international exposure, and potential for the many projects afoot to delay recovery.”

Bank of America maintained a Neutral rating and lowered its price target from $165 to $160.

Credit Suisse: A Reset Of Expectations

Bears will focus on the decline in guidance and worsening currency pressures, but Credit Suisse analyst Kaumil Gajrawala said the investor day effectively reset forecasts and expectations.

“Importantly, outlook for U.S., the largest area of concern, has not changed,” the analyst said in a Wednesday note.

Underlying expectations for 1-3% organic sales growth remain in place, indicating that current tracked channel weakness and pricing issues are accounted for in the guidance, he said. The guidance includes an improvement in the back half of next year, the analyst said.

Credit Suisse maintained an Outperform rating and lowered the price target from $172 to $168.

Clorox shares were down 1.56% at $147.02 at the close Thursday.

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