Clorox stock reduced to an underweight position at JPMorgan after Beateven profits

Clorox (CLX) – Get the Clorox Company Report Tuesday was demoted by analysts at JPMorgan and received cautious support from others after the household supplies icon beat Wall Street earnings expectations in the first quarter, but warned against persistent cost pressures.

Shares of the Oakland, Calif., Company in the last check were up 2.1% to $ 166.88.

For the fiscal quarter ended Sept. 30, Clorox posted net income of $ 142 million, or $ 1.14 per share, from $ 415 million, or $ 3.22 per share, a year earlier. Net sales fell 6% to $ 1.8 billion.

Analysts polled by FactSet expected the company to report earnings of $ 1.03 per share and revenue of $ 1.7 billion.

Managing Director Linda Rendle said that “while the environment remains volatile and we expect cost pressures to persist, our first quarter performance, coupled with the actions we are taking, puts us on track to meet our targets. outlook for the 2022 financial year “.

JPMorgan analyst Andrea Teixeira downgraded Clorox to underweight from neutral and lowered its price target to $ 147 from $ 171.

The analyst said the downgrade was due to the expected increase in cost pressures, from $ 300 million to $ 350 million. The new figure still assumes an improvement in the background, potentially jeopardizing the outlook for the entire year.

“While we believe that CLX should ultimately be a long-term beneficiary of the consumption habits developed during the pandemic,” she said, “we believe the outlook for FY22 highlights that consumer demand is ‘is normalized faster than initially expected “.

In August, Clorox forecast annual sales lower than analysts’ estimates due to easing pandemic fears putting the brakes on the company’s bleach, wipes and surface cleaners.

DA Davidson analyst Linda Bolton Weiser raised her price target on Clorox to $ 162 from $ 145, but kept a neutral rating on stocks.

The company’s first-quarter revenue was higher in part due to the decline from the second quarter and its gross margin above 1 percentage point, Weiser said in a research note, according to the Fly.

She added, however, that while the elasticity of demand has improved from pre-pandemic levels, she is concerned about potential low volumes as a result of price increases. She added that management’s gross margin outlook may be difficult to achieve.

Deutsche Bank analyst Steve Powers raised his price target on Clorox to $ 160 from $ 156, while maintaining a maintenance rating on stocks.

The company beat estimates for the first fiscal quarter, driven by better-than-expected demand in its portfolio, Powers said.

But the analyst said the quarter also benefited to some extent from the timing of shipments, leading to increased inventory at retailers. This inventory is likely to come undone in the second quarter.

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