Clorox (CLX) PT Lowered to $134 at Goldman Sachs

Goldman Sachs analyst Bonnie Herzog lowered the price target on Clorox (NYSE: CLX) to $134.00 (from $138.00) while maintaining a Sell rating.

The analyst comments "Our View - CLX reported a weaker than expected FQ3, with a miss on both the top-and bottom-line. Organic sales were down -2% (vs. GS/VA cons ests of +1.1%/+0.7%) as consumption slowed through the quarter, echoing sentiment we've heard from several other CPG companies this earnings season. Despite slower category consumption, gross margins expanded an impressive ~240bps y/y to 44.6% as cost savings were more than enough to offset cost inflation, although higher than expected operating expenses led to a bottom-line miss, with FQ3 EPS at $1.45 (vs. GS/FactSet cons ests of $1.55). Given the tough environment, mgmt lowered its FY25 organic sales growth guidance to +4-5% (from +4%-7% prior) but maintained its EPS growth guidance of +13% to +19%. Mgmt also updated the estimated impact from the incremental shipments as retailers build inventory in advance of its ERP transition. Mgmt now expects a 2-3pt lift to organic sales (vs its previous expectation of 1 to 2pts), which we find surprising given the slowing demand backdrop. As such, we believe the high end of mgmt's revised organic sales guide could ultimately prove ambitious, especially if retailers continue to manage inventory levels lower in the face of a softer consumer. Net/net - we lower our EPS estimates and Price Target by $4 to $134. We remain Sell rated on CLX."

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