Tuesday, November 4, 2014

One Reason Clorox (CLX) Stock Is Climbing Today

NEW YORK (TheStreet) -- Shares of The Clorox Co. are up 2.19% to $102.02 in early morning trading on Tuesday after the company's price target, EPS estimates, and cash flow per share estimates were increased at BMO Capital Markets. The firm set a price target of $101--up from its previous mark of $85--for the multinational consumer, professional manufacturing and marketing company. BMO Capital increased annual EPS estimates for the company to $4.50 from $438 for fiscal 2015, and to $4.70 from $4.61 for fiscal 2016. Must Read: Warren Buffett's 25 Favorite Stocks STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more. The firm also raised Clorox's annual CFPS (cash flow per share) estimates to $1.39 from $1.34 for fiscal 2015, and to $1.48 from $1.40 for fiscal 2016. BMO Capital reiterated its "market perform" rating and said the company is cutting costs. Separately, TheStreet Ratings team rates CLOROX CO/DE as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation: "We rate CLOROX CO/DE (CLX) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in stock price during the past year, expanding profit margins, growth in earnings per share and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income." Highlights from the analysis by TheStreet Ratings Team goes as follows: CLX's revenue growth has slightly outpaced the industry average of 1.0%. Since the same quarter one year prior, revenues slightly increased by 0.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share. The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year. 45.93% is the gross profit margin for CLOROX CO/DE which we consider to be strong. Regardless of CLX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 6.65% trails the industry average. CLOROX CO/DE's earnings per share improvement from the most recent quarter was slightly positive. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CLOROX CO/DE reported lower earnings of $4.28 versus $4.32 in the prior year. This year, the market expects an improvement in earnings ($4.42 versus $4.28). Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Household Products industry and the overall market, CLOROX CO/DE's return on equity significantly exceeds that of both the industry average and the S&P 500. You can view the full analysis from the report here: CLX Ratings Report STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.


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