Shares of Clorox (CLX) are rising 3.5% in premarket trading Monday morning, ahead of the bleach maker's fiscal third quarter earnings report to be released after the market closes today.
Although analysts anticipate CLX will see both sales and profits fall for the period, they remain upbeat about its turnaround and forecast the stock could rise 12% over the next year.
Wall Street is looking for Clorox to experience a 5% drop in revenue to $1.7 billion and for profits to fall nearly 9% to $1.56 per share. While sales and profits contracted in the fiscal second quarter as well, it was going up against tough comparables as retailers restocked their inventory following a cyberattack against the company and it divested its vitamins and supplements business while also exiting Argentina.
However, analysts remain bullish because gross margins keep expanding and should hit their targeted 44% – its historical range – by year' end. Margins hit a trough in 2022 amid rapidly rising interest rates and cost inflation that sank the business.
As Clorox is expected to spend at least $1 billion a year annually on R&D and marketing, Wall Street believes it will effectively counter the threat across its business lines from private-label goods. Analysts have a consensus, one-year price target of $156 per share, some 12% above where it currently trades.
Clorox, which owns a portfolio of top brands beyond its namesake bleach, including Kingsford charcoal, Liquid PLUMR, and Pine-Sol disinfectant cleaner, has forecast full-year 2025 adjusted earnings to come in between $6.95 to $7.35 per share. That's a significant increase from its previous guidance of $5.17 to $5.42 per share and a penny per share higher at the midpoint of analyst projections of $7.14 per share.
CLX stock is on the cusp of becoming a Dividend King, having raised its payout for 49 consecutive years. With five- and 10-year compound annual growth rates of 5%, investors can likely see the payout grow to around $5.12 per share from its current $4.88 per share annually.
