Jefferies lowers Clorox stock price target on ERP rollout concerns
Investing.com
Published Jun 26, 2025 08:55AM ET
Investing.com - Jefferies lowered its price target on Clorox (NYSE:CLX) to $145.00 from $167.00 on Thursday, while maintaining a Buy rating on the consumer goods company. The stock currently trades at $119.48, down nearly 26% over the past six months. According to InvestingPro analysis, Clorox appears undervalued relative to its Fair Value, with a solid 4.08% dividend yield.
The price target reduction comes as Jefferies expects complications in modeling Clorox's performance over the next two quarters due to shipping timing issues related to the company's upcoming U.S. Enterprise Resource Planning (ERP) system rollout and wind down.
Jefferies anticipates these ERP-related changes will create unexpected operating leverage and deleverage effects that could surprise investors as the implementation progresses.
The research firm projects Clorox will guide to negative 4% to negative 2% organic sales growth and a low-teens percentage earnings per share decline for fiscal year 2026.
Jefferies believes current consensus estimates for Clorox are too high and need "recalibration," though the firm sees investment opportunity in what it describes as the "messiness" of the transition period.
In other recent news, Clorox has experienced several notable developments. The company reported fiscal third-quarter earnings that fell short of expectations, with earnings per share (EPS) of $1.45, missing the consensus estimates of $1.57. Clorox's organic sales declined by 2% year-over-year, contrasting with projections of flat growth, and the company has adjusted its organic sales growth forecast for the fiscal year 2025 to 4-5%. Despite these challenges, Clorox saw an improvement in its gross margin, which increased by 240 basis points to 44.6%.
Analysts have been adjusting their outlooks on Clorox, with Jefferies cutting its price target to $167 while maintaining a Buy rating, and Wells Fargo reducing its price target to $142 with an Equal Weight rating. JPMorgan also revised its price target to $144, maintaining a Neutral rating, citing concerns about consumer demand and retailer destocking. Additionally, Clorox announced the appointment of Gina Boswell, CEO of Bath & Body Works, to its board of directors, expanding the board to 12 members. These recent developments reflect both ongoing challenges and strategic changes within Clorox as it navigates the current market environment.
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