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Wednesday, October 21, 2020

The Clorox Company (NYSE:CLX) on the Path to Profitability

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The Clorox Company (CLX) shares are trading at higher $215.13 and the avg recommendation for the stock is Moderate Buy, while the current analyst price target stands at $224.85.

To add more color to this target, the company’s high over the last year is $239.87 and the low is $144.31. Over the last 52 weeks, CLX is up 43.61% while the S&P 500 is up 18.10%. The catalyst for this interesting swing was the company’s recent earnings report.

A Notable Earnings Report

In the last quarter, CLX reported a profit of $929.0 million. The Clorox Company also saw revenues increase to $1.98 billion. In addition, CLX has free cash flow of $1.29 billion as of 06-2020. The company’s EBITDA came in at $441.0 million which compares well with its peers.

CLX booked profit margins of 14.00%, its Return on Equity (ROE) is 138.70%, and its Return on Assets is 16.40%. All told, it is clear that, CLX needs to be on your watchlist.

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Of course, we must look beyond the financials and question how well those numbers represent the sustainable earnings power of the business. Investors need to know how sustainable this current run. CLX has a short ratio of 10.01 and outstanding shares of 126.39M.

Company Outlook

CLX has seen increased volume after this news and investors are putting their support behind the value proposition. Traders will also note the company’s earnings per share came in at 7.35. The Clorox Company CLX also noted assets of $6.21 billion at the end of the last quarter. Investors should also keep an eye on sector updates as CLX has historically followed its peers on positive news.

All told, The Clorox Company CLX has strung together solid data and demonstrated underlying fundamentals. At its current valuation, CLX represents an interesting risk/reward case. Traders should stay tuned to see if this recent report will push the stock to test recent resistance levels.

The Clorox Company CLX is now commanding a market cap of 27.47B and a float of 126.04M. CLX is increasing its credibility in this sector and that could lead to more upside down the line. Sign-up for continuing coverage on shares of CLX stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in CLX, either long or short, and we have not been compensated for this article.

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