With Covid Fading, Clorox’s Stock Is Roughly Back Where It Began
(Bloomberg) -- As Covid-19 swept across the U.S. last year, Clorox Co.’s wipes and cleaning products disappeared from store shelves due to surging demand for disinfectants, sending the company’s stock to its highest level ever.
This year, however, has been a different story. With Covid receding, Clorox shares are down around 19%, wiping out their pandemic-era gains. The company, which is due to report earnings Monday after the market closes, is trading around where it did at the beginning of March 2020, before it rocketed nearly 50% to an August 2020 peak. Analysts, whose price targets averaged above $220 at the height of the rally, have brought that down to $161 on average.
“I would say the overall sentiment is still cautious on Clorox, given the tough comparisons ahead and the cost pressures,” JPMorgan analyst Andrea Teixeira said in an interview.
Teixeira, who boosted her rating from an underweight to overweight in March 2020, pulled it back to be neutral in October 2020. “Most of the good news was priced in,” she said.
Clorox shares are little changed as of 1:52 p.m. in New York on Monday.
Read more: Clorox to Report Results; Shares Down 19.0% YTD: Preview
The company’s earnings report will offer a glimpse of how rising cost pressures on things like low-density resin and expected revenue declines could be pressuring margins, according to Bloomberg Intelligence. The market will be trying to determine whether the worst of the cost increases have already been felt, senior consumer analyst Mike Dennis said in an interview.
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