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Barclays Says These Cleaning and Sanitation Stocks Will Shine Even After Pandemic

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Barclays analyst Lauren Liebermann expects cleaning and sanitation companies to remain long-term beneficiaries of the COVID-19 pandemic.

What Happened: “Pre-pandemic, sanitization/cleaning was mostly taken for granted, but in a post-pandemic world we believe consumers and employees will demand that places not only ‘be clean’ but also ‘show clean,’” Liebermann said in a note, as first reported by CNBC.

The Barclays analyst sees larger incumbents and well-known consumer brands benefiting in particular as she foresees "a greatly expanding addressable market as well as share consolidation" in the $30 billion industry.

The Barclays analyst estimates a 10% to 20% uptick in same-store sales compared to the pre-coronavirus period for cleaning and sanitation companies and lists the following stocks as the ones particularly to watch, CNBC noted.

Ecolab Inc (NYSE: ECL): With an estimated market share between 12% to 16%, Liebermann expects the company to target a 20% hike in penetration rate among its current customers. Since the beginning of the year, Ecolab stock has risen merely by 14.6%. Based on the company’s operational scale, service, innovation, and technological abilities, the Barclays analyst predicts a consolidation.

Ecolab shares last closed 0.8% lower at $221.25 on Friday.

Cintas Corporation (NASDAQ: CTAS) Liebermann pointed out that although primarily in the business of uniform rentals, the company’s revenues from its sanitization and hygiene facility service offering contributes almost 10% to the total revenue.

Cintas shares closed 0.5% higher at $349.11 on Friday.

Proctor & Gamble Co (NYSE: PG): Liebermann notes that the consumer goods company has booked a systematic growth from its cleaning solutions segment, P&G Professional. “Post-pandemic P&G Professional should be nicely placed to continue gaining share,” the analyst said, as per CNBC.

PG shares last closed 0.74% higher at $136.51.

Clorox Co (NYSE: CLX): The company’s Professional Products Segment, including the Clorox Pro, could be one of the growth drivers, as per Liebermann. Stock is up 30% driven by higher demand for bleach and disinfectant wipes. The Barclays analysts forecast this segment to be one of the “compelling growth opportunities” for the company.

Clorox shares were up 0.56% at $201.73 on last close.

Reckitt Benckiser Group PLC - ADR (OTC: RBGLY): In July, Reuters reported that the British consumer goods company partnered into long term contracts with multiple companies. The analyst anticipates selected and sizeable contracts to boost sales volumes.

RBGLY shares closed 0.1% lower at $17.78 on Friday.

Aramark Corporation (NYSE: ARMK): Aramark’s core business is in the food delivery market but the company also holds growth prospects in the facilities management business, according to Liebermann.

Aramark shares closed 1.2% lower at $37.60 on Friday.

See Also: Analyst Recommends These ETFs To Play 3 Key Themes For 2021 — EVs, Cannabis, And COVID-19 Recovery

Latest Ratings for CTAS

Oct 2020

Morgan Stanley

Maintains

Underweight

Oct 2020

Jefferies

Maintains

Buy

Oct 2020

Argus Research

Initiates Coverage On

Buy

View More Analyst Ratings for CTAS
View the Latest Analyst Ratings

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