Core Insights - Investors are shifting towards dividend-paying stocks as a hedge against risks associated with artificial intelligence, with notable performance in traditional sectors compared to large-cap tech [2][3] - The iShares Select Dividend ETF has increased nearly 11% year-to-date, while the Schwab US Dividend Equity ETF is up about 15%, contrasting with a largely flat S&P 500 [2] - The widening performance gap between big tech and older economy stocks is prompting portfolio rebalancing among investors [3] Company Summaries Illinois Tool Works Inc. (NYSE:ITW) - The company has a payout ratio of 59.2% and was recently rated Underweight by Barclays, despite a price target increase from $244 to $275 [9] - Illinois Tool Works reported Q4 earnings of $2.72 per share, exceeding expectations of $2.68, with revenue rising to $4.09 billion from $3.93 billion year-over-year [10][12] - The Automotive OEM segment generated $827 million in revenue, up from $785 million a year earlier, supported by steady demand for automotive parts [11] Church & Dwight Co., Inc. (NYSE:CHD) - The company has a payout ratio of 36.87% and was upgraded to Neutral from Sell by Rothschild & Co Redburn, with a price target increase from $81 to $91 [14] - Church & Dwight reported adjusted earnings of 86 cents per share, surpassing analysts' estimates of 84 cents, benefiting from steady demand for household products [18] - The company expects gross margin expansion of about 100 basis points in 2026, reflecting ongoing efficiency improvements [16] Tractor Supply Company (NASDAQ:TSCO) - The company has a payout ratio of 43.96% and faced a price target reduction from $55 to $53 by TD Cowen, maintaining a Hold rating [20] - Tractor Supply reported Q4 net sales of $3.90 billion, slightly below estimates, with comparable store sales rising just 0.3% [24] - The company anticipates fiscal 2026 net sales growth of 4% to 6%, below analysts' average estimate of 6.3% [24]

Core Viewpoint - Church & Dwight has demonstrated consistent growth by leveraging a balanced portfolio and recent acquisitions, aiming to deliver strong shareholder returns [2]. Company Overview - Church & Dwight is represented by Rick Dierker, President and CEO, and Lee McChesney, CFO, who joined the company last year [1]. - The company is recognized for its efficiency in presentations, humorously noted for potentially winning an Olympic category for quickly navigating through extensive slides [2]. Growth Strategy - The company continues to drive growth despite market volatility by utilizing its balanced portfolio and integrating recent acquisitions to create more growth opportunities [2].

Church & Dwight (NYSE:CHD) 2026 Conference February 18, 2026 08:00 AM ET Company ParticipantsLee McChesney - CFORick Dierker - President and CEOConference Call ParticipantsNone - AnalystModeratorMorning, everyone. Welcome to the second day of CAGNY. To start us off today, we have Church & Dwight. Let's first thank Church for sponsoring this morning's tasty breakfast and for their long-standing support of CAGNY. Joining us today from Church & Dwight are Rick Dierker, President and CEO, and Lee McChesney, CFO ...

CAGNY 2026 SAFE HARBOR STATEMENT This presentation contains forward-looking statements, including, among others, statements relating to net sales and earnings growth; gross margin changes; trade, marketing, and SG&A spending inflation; sufficiency of cash flows from operations; earnings per share; cost savings programs; consumer demand and spending; the effects of competition; the effect of product mix; volume growth, including the effects of new product launches into new and existing categories; the impact ...

Acquisitions and Divestitures - The company completed the acquisition of Touchland Holding Corp for $656.0 million, with an additional payment of $159.0 million based on 2025 net sales thresholds[20]. - The company announced the exit from the Flawless, Spinbrush, and Waterpik showerhead businesses, which generated approximately $118.0 million in annual net sales in 2025, resulting in a pre-tax charge of $45.6 million[21]. - The divestiture of the VitaFusion and L'il Critters brands was completed on December 31, 2025, with a one-time pre-tax charge of $58.5 million incurred in the fourth quarter[22][23]. Sales and Revenue Breakdown - Household products accounted for approximately 54% of Consumer Domestic sales and 41% of consolidated net sales in 2025[25]. - Personal care products represented approximately 46% of Consumer Domestic sales and 36% of consolidated net sales in 2025[28]. - Total Consumer International net sales constituted about 18% of consolidated net sales in 2025, with no product line exceeding 20% of total international net sales[32]. - The Specialty Products Division accounted for approximately 5% of consolidated net sales in 2025[35]. Supply Chain and Raw Materials - The company has increased qualified dual sources of materials to approximately 70% of total spend on direct materials to enhance supply chain resilience[50]. - The cost of raw materials, including surfactants and oil-based materials, increased modestly in 2025 compared to 2024, potentially impacting financial results if costs cannot be passed to customers[51]. - The company has adequate trona reserves to support sodium bicarbonate production for the foreseeable future, sourced primarily from its Green River, Wyoming plant[48]. - The partnership with Tata Chemicals for soda ash supply allows the company to achieve economies of scale in sodium bicarbonate production[49]. Regulatory Compliance - Regulatory compliance is critical, with products subject to oversight by agencies such as the FDA and EPA, impacting manufacturing and marketing practices[56]. - The company markets over-the-counter pharmaceutical products that must comply with FDA regulations, including the OTC monograph system[65]. - The company is subject to various international quality system regulations, ensuring compliance with cGMP requirements for medical devices and OTC pharmaceuticals[72]. - The company is actively monitoring changes in regulations that could impact its dietary supplements and OTC products, particularly under the FDA's updated monograph system[65]. Workforce and Employee Engagement - As of December 31, 2025, the company had approximately 5,550 global employees, a decrease of about 200 compared to December 31, 2024[87]. - The overall turnover rate for fiscal 2025 was approximately 17%[87]. - Revenue per employee in fiscal 2025 was approximately $1.12 million[87]. - In 2025, the Employee Giving Fund provided approximately $1.3 million in contributions to 224 community organizations[95]. - The Church and Dwight Philanthropic Foundation awarded grants totaling approximately $1.1 million to ten organizations in 2025[96]. - The company emphasizes employee safety and wellness, ensuring compliance with OSHA standards[86]. - Approximately 85% of the workforce is located in the Americas, 11% in Europe, Middle East, and Africa, and 4% in the Asia-Pacific region[87]. - The company launched several Employee Resource Groups (ERGs) in 2023 to promote diversity and inclusion[90]. - The company invests in professional development and growth to improve employee performance and retention[92]. - The company offers competitive salaries and a range of benefits, including health insurance and retirement plans[93]. Competitive Landscape - The competitive landscape includes major players like Procter & Gamble, Clorox, and Colgate-Palmolive, with significant pricing pressures from retail customers[41][42]. - The company's largest customer, Walmart Inc., accounted for approximately 23% of consolidated net sales for the years ended December 31, 2025, 2024, and 2023[55]. - The competitive environment includes significant pricing pressure from retail customers, particularly high-volume retailers, impacting margins[42].

Group 1 - Church & Dwight Co., Inc. will present at the 2026 Consumer Analyst Group of New York (CAGNY) Conference on February 18, 2026, at 8:00 AM EST, with a webcast available on the company's website [1] - The company is a leading U.S. producer of sodium bicarbonate and offers a wide range of personal care, household, and specialty products under well-known brands such as ARM & HAMMER®, TROJAN®, and OXICLEAN® [1] - For the full year 2025, Church & Dwight reported net sales of $6,203.2 million, reflecting a 1.6% increase, surpassing the company's outlook of 1.5% growth [1] Group 2 - Organic sales for 2025 grew by 0.7%, despite a 130 basis points impact from the decline in the exited VMS business and a slowdown in category growth [1] - The company has completed a strategic review of its vitamin, minerals, and supplement (VMS) business and announced the sale of the VitaFusion® and L'il Critters® brands to Piping Rock Health Products, Inc. [1]

Core Viewpoint - Church & Dwight Co. (CHD) was previously assigned a hold rating due to its high valuation multiple and challenges in accelerating growth, but recent international execution improvements may indicate a shift in outlook [1] Group 1: Company Performance - The company has faced challenges in achieving accelerated growth, which contributed to the initial hold rating [1] - Recent developments suggest that international execution has improved, potentially impacting future growth prospects positively [1] Group 2: Investment Strategy - The investment approach focuses on identifying undervalued companies with long-term growth potential, emphasizing the importance of buying quality companies at a discount to their intrinsic value [1]

Core Insights - The company reported total sales of $6.2 billion, with a 3.9% growth in Q4 and a full-year growth of 1.6%, despite portfolio changes [3][5] - Organic sales growth was 0.7% for the full year, but adjusted for exited VMS business, organic growth was 2% [3][5] - Gross margin increased by 90 basis points year-over-year in Q4 and is projected to improve by 100 basis points in 2026 [3][5] - The company achieved an EPS of $0.86 in Q4, which is 12% higher than the previous year, with a 2026 outlook targeting 5%-8% growth [3][5] - Free cash flow for 2025 was $1.2 billion, with a conversion rate of 127%, and guidance for 2026 is $1.15 billion [3][5] - A 4.2% increase in dividends was announced for 2026, marking the 125th consecutive year of dividend payments [3][5] Portfolio Reshaping - The company divested low-margin and private-label-heavy businesses, reducing private label exposure from 12% to 5% [5][16] - The acquisition of Touchland contributed positively to sales and is being expanded internationally through premium partnerships [5][8] Brand Performance - Four of the eight core power brands grew market share, with Hero and TheraBreath achieving double-digit growth [7][11] - ARM & HAMMER attained a record 14.5% wash-load share in laundry, while TheraBreath reached nearly 22% market share in mouthwash [8][56] - The skincare brand Hero grew at three times the category rate, achieving a 19% share [8][64] Growth Outlook - The company projects 2026 organic growth of 3%-4%, with U.S. growth at 3% and international growth at 8% [7][38] - Marketing investment is planned at 11% of sales for 2026, consistent with the company's growth framework [7][38] - E-commerce penetration increased from 2% to 24% of total sales, driving above 14% growth for key brands [7][8] Innovation and Expansion - More than half of organic growth is expected to come from new product development, with a 2026 innovation pipeline including launches in oral care and premium laundry products [5][8] - The international business registered 5.5% organic growth in 2025, supported by brand localization and regional innovation initiatives [8][28] - The company aims to grow ARM & HAMMER from $2 billion to $3 billion and TheraBreath from $1 billion to $1.5 billion over time [21][22]

Core Viewpoint - The article summarizes key analyst rating adjustments that are closely watched by Wall Street and can influence market trends, highlighting significant upgrades, downgrades, and new coverage ratings for various companies [1][5]. Upgraded Ratings - Aritet Investment upgraded Shopify (SHOP) from Neutral to Buy, raising the target price from $166 to $175, citing attractive valuation after recent weakness [6]. - William Blair upgraded Palantir (PLTR) from Market Perform to Outperform ahead of its earnings report, emphasizing valuation advantages as the core reason for the upgrade [6]. - BTIG raised McDonald's (MCD) rating from Neutral to Buy with a target price of $360, noting that research on franchisees indicates effective promotional strategies are driving customer traffic growth [6]. - JPMorgan upgraded Autodesk (ADSK) from Neutral to Overweight, maintaining a target price of $319, due to differentiated fundamentals in the vertical software as a service sector [6]. - JPMorgan raised Church & Dwight (CHD) from Underweight to Neutral, increasing the target price from $92 to $100, believing that business adjustments will lead to better sales growth [6]. Downgraded Ratings - JPMorgan downgraded Best Buy (BBY) from Overweight to Neutral, significantly lowering the target price from $99 to $76, anticipating an "unfavorable" earnings report for Q4 [6]. - Leith Wheeler downgraded BioNTech (BNTX) from Outperform to Market Perform, slightly raising the target price from $112 to $113, while expressing long-term optimism about the company's differentiated R&D potential [6]. - Canadian Imperial Bank downgraded Fortinet (FTNT) from Outperform to Sector Perform, maintaining a target price of $85, expressing caution about the stock's performance in 2026 [6]. - HSBC downgraded Chevron (CVX) from Buy to Hold, raising the target price from $169 to $180, citing valuation factors as the main reason for the downgrade [6]. - Morgan Stanley downgraded Humana (HUM) from Equal Weight to Underweight, significantly lowering the target price from $262 to $174, citing risks related to bidding strategies and policies affecting profit margin recovery [6]. New Coverage Ratings - Jefferies initiated coverage on Micron Technology (MU) with a Buy rating and a target price of $500, believing that the company's fourth-generation high-bandwidth memory (HBM4) will capture market share post Q2 [6]. - Morgan Stanley initiated coverage on Circle Network (CRCL) with an Equal Weight rating and a target price of $66, indicating that higher valuations are unlikely until stablecoin technology becomes more widely adopted [6]. - Citizens Bank initiated coverage on Stewart Information (STC) with an Outperform rating and a target price of $80, citing significant attractiveness at current valuation levels [6]. - Wells Fargo initiated coverage on Praxis Precision Medicines (PRAX) with an Equal Weight rating and a target price of $282, noting uncertainty regarding the approval prospects of the drug ulixacaltamide [6]. - Craig-Hallum initiated coverage on Simon Group (THR) with a Buy rating and a target price of $60, highlighting the company's improved business conditions and diversification benefiting from data center cooling technology trends [6].

Upgrades - JPMorgan upgraded Church & Dwight (CHD) to Neutral from Underweight with a price target of $100, up from $92, citing better sales growth from the reshaped portfolio [2] - JPMorgan upgraded Autodesk (ADSK) to Overweight from Neutral with an unchanged price target of $319, due to a shift in conviction driven by diverging fundamentals in the software-as-service landscape [2] - BTIG upgraded McDonald's (MCD) to Buy from Neutral with a price target of $360, indicating that franchise checks suggest a successful value/promotions strategy driving consistent traffic growth [3] - William Blair upgraded Palantir (PLTR) to Outperform from Market Perform without a price target, citing valuation after a 30% selloff [3] - Arete upgraded Shopify (SHOP) to Buy from Neutral with a price target of $175, up from $166, noting an attractive valuation following recent share weakness [4] Downgrades - JPMorgan downgraded Best Buy (BBY) to Neutral from Overweight with a price target of $76, down from $99, anticipating a tough Q4 report [5] - Leerink downgraded BioNTech (BNTX) to Market Perform from Outperform with a price target of $113, up from $112, citing a lack of meaningful data readouts until 2027 or later [5] - Scotiabank downgraded Fortinet (FTNT) to Sector Perform from Outperform with an unchanged price target of $85, expressing reduced optimism based on quantitative analysis and recent checks [5] - HSBC downgraded Chevron (CVX) to Hold from Buy with a price target of $180, up from $169, citing valuation concerns following the stock's year-to-date rally [5] - Morgan Stanley downgraded Humana (HUM) to Underweight from Equal Weight with a price target of $174, down from $262, indicating that the company's 2026 bid strategy and policy risk may hinder margin turnaround [5]