Clorox: Reduced Complexity Paves The Way For Multiple Expansion
Clorox (CLX) is trading at an attractive valuation following operational disruptions and underperformance, with a 5% dividend yield and expected EPS accretion from the Purell (GOJO) acquisition by FY27. The company is projected to achieve double-digit earnings growth, supporting potential multiple expansion and around 20% upside. Despite risks from customer concentration and consumer value sensitivity, strong cash flow aids deleveraging and dividend sustainability. Shares appear undervalued relative to peers given improving fundamentals.
- ▪Clorox (CLX) is down nearly 29% over the past year despite improving underlying fundamentals.
- ▪The company offers a 5% dividend yield and is recovering from cyber attack and ERP system disruptions.
- ▪The acquisition of Purell (GOJO) is expected to be accretive to EBITDA and EPS by fiscal year 2027.
- ▪CLX trades at 14.5x FY27 EPS with projected top-line growth above its long-term algorithm.
- ▪Risks include high customer concentration, private label competition, and consumer value-seeking behavior.
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