Wells Fargo Downgrades Clorox (CLX) to Underweight; 'Dead Money at Best'

May 3, 2021 6:31 AM EDT
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Price: $163.66 +0.78%

Rating Summary:
    3 Buy, 14 Hold, 5 Sell

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Today's Overall Ratings:
    Up: 17 | Down: 5 | New: 35
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(Updated - May 3, 2021 6:39 AM EDT)

Wells Fargo analyst Chris Carey downgraded Clorox (NYSE: CLX) from Overweight to Underweight, PT $170 (from $240.00).

The analyst comments "We are downgrading shares of CLX to Underweight from Overweight and lowering our price target to $170 (from $240) based on 23x our CY22e EPS. Dead money at best, with downside, in our view. We fought the good fight on CLX, arguing for a contrarian play with fundamental disconnects. The initiation spike in February made our prior thesis from December challenging, but with 4/30 earnings falling short on top-line and pricing plans muted, numbers need a significant reset, and there's just not much left for us to hold onto at the moment, in our view. Our new FY22e EPS $7.20 is -10% vs Street, and we're not convinced that's low enough, with 'good' still factored in our model. With disappointing FY22 guidance well below Street potentially on the horizon, we're certainly not stubborn enough to keep, and indeed are compelled to change, our rating. We decrease our FY21/22e EPS to $7.55/$7.20 from $8.45/$8.35."

For an analyst ratings summary and ratings history on Clorox click here. For more ratings news on Clorox click here.

Shares of Clorox closed at $182.50 yesterday.


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