© Reuters. Clorox (CLX) FY24 guidance incorporates ‘appropriate degree of conservatism’ – UBS
UBS analysts upgraded Clorox (NYSE:) to neutral from Sell, raising the price target for the stock to $132 from $124 in a note Monday.
The analysts said that while the headwinds for the company aren’t all-clear, they see the risk/reward for the stock as now balanced.
“We are upgrading shares of CLX to Neutral from Sell following the company’s F1Q results and guidance update,” the analysts said. “Even after the +9% move post results last week, we view the risk/reward as balanced with concerns around relative share performance and the ability to return to volume growth offset by shares trading at a narrower premium to peers (~30% vs ~45% 5-year avg) and the potential for a meaningful bottom-line recovery in FY25.”
In the near term, UBS believes the company’s FY24 guidance incorporates an “appropriate degree of conservatism” in light of the dynamic operating environment. In addition, they believe the company could be setting up for strong +DD EPS growth in FY25.
Despite the slight positives, the analysts at UBS said that for the investment bank to become more constructive on the stock, they “would need to gain more confidence in the company’s ability to drive the volume/share growth necessary to boost valuation from here.”
