Church & Dwight (CHD) delivered a stronger-than-expected Q2, with organic sales growth of 5.8% exceeding consensus and outpacing major household and personal care peers, reinforcing the company's underlying brand momentum, Morgan Stanley said in a note Monday.
The investment firm said the quarter eased concerns over softer industry trends and retailer inventory adjustments, with broad-based consumer growth led by TheraBreath and Hero supporting its view that the company's guidance for about 3% Q3 organic sales growth signals resilient demand despite tougher second-half comparisons.
Church & Dwight raised its full-year 2026 outlook, increasing its organic sales growth forecast to a 4% to 5% range from 3% to 4% previously, adjusted gross margin expansion to between 100 basis points and 120 basis points from about 100 basis points, and operating cash flow guidance to about $1.175 billion from $1.15 billion, according to the note.
The company also narrowed its full-year adjusted earnings growth guidance to 6% to 8% from its prior outlook of 5% to 8%, supported by higher organic sales growth, modest gross margin improvement and a lower expected tax rate, the firm said.
Morgan Stanley maintained its equal-weight rating on the stock and raised its price target to $112 from $105.
Church & Dwight shares were up 1.9% in Monday trading.
Price: 100.71, Change: +1.90, Percent Change: +1.92
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