4 Reasons To Retain Clorox (CLX) Stock In Your Portfolio
Zacks Investment Research | Jun 25, 2017 09:08PM ET
Holding on to stocks with solid growth potential is prudent for investors looking for solid returns. One such stock is the consumer products seller, Clorox Inc. (NYSE:CLX) , which is doing well on the back of its solid surprise trend, robust outlook, impressive stock performance, progress on 2020 Strategy, diversified brand portfolio and disciplined capital strategy. The stock also has a long-term earnings growth rate of 6.8%. So, let’s get a better understanding of how these traits are working for the company.
Robust Earnings History & Outlook
Clorox earnings history reveals that the company has delivered positive earnings surprise in six of the last eight quarters, with third-quarter fiscal 2017 marking its second consecutive beat. While top-line results for the last reported quarter were marginally short of estimates, it marked the company’s first miss following four consecutive beats. The recent quarter results gained from strong sales, lower tax rate and gain from sale of an international facility that forms part of its Go Lean strategy. Further, sales were aided by improved volumes, contributions from RenewLife and better International pricing.
While Clorox expects the macroeconomic headwinds to persist going forward, it is all set to counter the hurdles with prudent strategies. The company plans to offset stiff competition with increased brand investments. Further, it is on track with the Go Lean strategy to fight slowing global economies. Moreover, the company aims to keep cost-savings and pricing in place, to battle the expected inflation and increasing commodity pricing.
Further, the company anticipates boosting sales and volumes in fourth-quarter fiscal 2017 driven by the intense advertising and promotion investments to enhance brand value that were incurred in the fiscal third quarter. It also envisions EBIT margin to improve in the fourth quarter backed by lower selling and administrative costs. That said, management remains confident of delivering another year of top and bottom-line growth.
Stock Movement
This Oakland, CA-based retailer has outperformed both the broader industry and sector in the past one month. Evidently, shares of Clorox advanced 5.9% in the past one month, compared with the Zacks categorized Zacks Investment Research
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