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Morningstar’s Analysis

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Cost Pressures Skyrocket for Clorox in Q1, but Competitive Position Should Remain Intact

Erin Lash, CFA Sector Director

Analyst Note

| Erin Lash, CFA |

We don’t expect to change our $161 fair value estimate (beyond time value) or our long-term outlook (which calls for 3%-4% annual sales growth and operating margins approximating 20% by the end of the next 10 years) for Clorox after digesting mixed first-quarter results. Following the mid-single-digit percent pop in shares in after-hours trading, we don’t view the stock as attractive, but would suggest investors keep an eye on this wide-moat name for any subsequent pullbacks in the share price.

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Company Profile

Business Description

With a history dating back more than 100 years, Clorox now sells a variety of consumer staples products, including cleaning supplies, laundry care, trash bags, cat litter, charcoal, food dressings, water-filtration products, and natural personal-care products. Beyond its namesake brand, the firm’s portfolio includes Liquid-Plumr, Pine-Sol, S.O.S, Tilex, Kingsford, Fresh Step, Glad, Hidden Valley, KC Masterpiece, Brita, and Burt’s Bees. Just shy of 85% of Clorox’s sales stem from its home turf.

Contact
1221 Broadway
Oakland, CA, 94612-1888
T +1 510 271-7000
Sector Consumer Defensive
Industry Household & Personal Products
Most Recent Earnings Sep 30, 2021
Fiscal Year End Jun 30, 2022
Stock Type Slow Growth
Employees 9,000

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