Clorox (CLX) could face slow underlying sales, lower margins and continued pressure in charcoal and litter, while the GOJO deal, trash bag share gains, and price increases may provide some support, RBC Capital Markets said in a note Tuesday.
The investment firm expects Clorox's fiscal 2027 sales to rise 13.5%, helped mainly by GOJO and comparisons with last year's system transition, as GOJO performed better than expected and should support sales, while Hidden Valley and Glad share gains offer some positive signs, while underlying growth is likely to remain between flat and 1%.
RBC cut its fiscal 2027 adjusted earnings estimate to $5.85 per share from $6.12 after Clorox issued weaker-than-expected gross margin guidance.
RBC said it expects weak demand and high inventory to weigh on Kingsford charcoal sales through the rest of the grilling season and into fiscal Q1.
RBC lowered the company's price target to $110 from $118 and kept its sector perform rating.
Price: 101.60, Change: +3.33, Percent Change: +3.39
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