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Clorox (CLX) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research
·3 mins read

In the latest trading session, Clorox (CLX) closed at $215.13, marking a +1.88% move from the previous day. This move outpaced the S&P 500's daily gain of 1.74%. Elsewhere, the Dow gained 1.91%, while the tech-heavy Nasdaq added 1.88%.

Heading into today, shares of the consumer products maker had lost 0.87% over the past month, outpacing the Consumer Staples sector's loss of 1% and the S&P 500's loss of 1.86% in that time.

Investors will be hoping for strength from CLX as it approaches its next earnings release, which is expected to be November 2, 2020. On that day, CLX is projected to report earnings of $2.38 per share, which would represent year-over-year growth of 49.69%. Our most recent consensus estimate is calling for quarterly revenue of $1.74 billion, up 15.8% from the year-ago period.

CLX's full-year Zacks Consensus Estimates are calling for earnings of $7.73 per share and revenue of $6.94 billion. These results would represent year-over-year changes of +5.03% and +3.3%, respectively.

Investors might also notice recent changes to analyst estimates for CLX. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 0.39% lower within the past month. CLX is holding a Zacks Rank of #4 (Sell) right now.

In terms of valuation, CLX is currently trading at a Forward P/E ratio of 27.32. For comparison, its industry has an average Forward P/E of 24.46, which means CLX is trading at a premium to the group.

It is also worth noting that CLX currently has a PEG ratio of 3.84. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Soap and Cleaning Materials industry currently had an average PEG ratio of 3.9 as of yesterday's close.

The Soap and Cleaning Materials industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 59, which puts it in the top 24% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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Zacks Investment Research