Citigroup – Clorox Stock Has Been a Pandemic Winner. Why These Positive aspects Might Be Everlasting.
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stock has had a terrific run up to now this yr and might go additional,
Analyst Wendy Nicholson argues that the shares (ticker: CLX) can rally greater than 20% as the corporate continues to ship constructive surprises whilst pandemic-related tailwinds subside. Nicholson boosted her score on Clorox to Purchase from Impartial Friday night, and raised her price goal to $249 from $238. The transfer comes after her current conferences with Clorox’s administration, together with Chief Monetary Officer Kevin Jacobsen, throughout which they mentioned the buyer merchandise firm’s ongoing plans to leverage adjustments in shopper conduct into longer-term beneficial properties.
Clorox has been one of many greatest beneficiaries of Covid-19. The shares have rallied some 32% yr to this point, given enormous will increase in demand for disinfectants and associated cleansing merchandise.
Nicholson notes that the corporate is ramping up manufacturing to fulfill that elevated demand. Clorox can also be hoping that larger cleansing requirements will stay in place post-pandemic, offering a better world alternative for its merchandise. This not solely contains elevated private family use of cleaners, however a rising worldwide presence—up from 15% of its enterprise right now—and an growing variety of company partnerships like those Clorox has signed with United Airlines (UAL) and others this yr.
Nonetheless, it’s inevitable that Clorox will face tough comparisons in 2021, given its enormous gross sales surge this yr. But Nicholson believes that there’s potential upside to the corporate’s full-year forecast, “given the staying power of Clorox’s portfolio with consumers and businesses.” She believes that most of the new clients Clorox attracted in the course of the pandemic will stay loyal, and the identical sample might repeat as the corporate pushes extra aggressively into markets around the globe.
Clorox is roughly flat in current buying and selling at $203. Different analysts have additionally remained upbeat concerning the shares, particularly following its robust earnings report delivered in November.
Write to Teresa Rivas at [email protected]