Investors with an interest in Consumer Products - Staples stocks have likely encountered both Ahold NV (ADRNY) and Clorox (CLX) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank is a proven strategy that targets c ...

Core Insights - Analysts expect Clorox (CLX) to report quarterly earnings of $1.57 per share, reflecting an 8.2% year-over-year decline [1] - Revenue is projected at $1.71 billion, down 5.5% from the same quarter last year [1] - The consensus EPS estimate has been revised 2.2% lower in the last 30 days, indicating a reevaluation of initial estimates by analysts [1][2] Revenue Estimates - 'Net Revenue - Health and Wellness' is forecasted to reach $597.23 million, indicating a -1.9% change from the prior-year quarter [3] - 'Net Revenue - Household' is expected to be $515.48 million, reflecting a -2% change year-over-year [4] - 'Net Revenue - International' is estimated at $258.40 million, showing a significant -16.7% change from the previous year [4] - 'Net Revenue - Lifestyle' is projected to be $314.14 million, indicating a -0.3% change from the prior-year quarter [4] Income Estimates - 'Income before income taxes - Health and Wellness' is estimated at $176.17 million, compared to $154 million in the same quarter last year [5] - 'Income before income taxes - International' is projected at $27.86 million, down from $38 million year-over-year [6] - 'Income before income taxes - Lifestyle' is expected to be $68.36 million, compared to $64 million in the same quarter last year [6] - 'Income before income taxes - Household' is estimated at $73.02 million, slightly down from $74 million in the same quarter last year [7] Stock Performance - Clorox shares have shown a return of -3.6% over the past month, compared to a -0.7% change in the Zacks S&P 500 composite [7] - The stock holds a Zacks Rank 3 (Hold), suggesting it is expected to mirror overall market performance in the near future [7]

Clorox Company Overview - Clorox is expected to report quarterly earnings of $1.57 per share, reflecting a year-over-year decline of 8.2% [3] - Revenues are anticipated to be $1.71 billion, down 5.5% from the same quarter last year [3] - The consensus EPS estimate has been revised 1.28% lower in the last 30 days, indicating a bearish sentiment among analysts [4] Earnings Surprise Prediction - The Most Accurate Estimate for Clorox is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -1.58% [10][11] - Clorox holds a Zacks Rank of 3 (Hold), complicating predictions of an earnings beat [11] - Historically, Clorox has beaten consensus EPS estimates in the last four quarters, with a notable surprise of +11.51% in the last reported quarter [12][13] Comparison with Industry Peers - Church & Dwight, another player in the consumer products industry, is expected to post earnings of $0.89 per share, a year-over-year decline of 7.3% [17] - Church & Dwight's revenues are projected to be $1.51 billion, showing a slight increase of 0.5% from the previous year [17] - The consensus EPS estimate for Church & Dwight has been revised 0.6% lower, but it has a positive Earnings ESP of 0.66%, suggesting a higher likelihood of beating the consensus estimate [18]

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Group 1 - Clorox thrived during the pandemic but has struggled to generate growth since then [1]

Core Viewpoint - The Clorox Company (CLX) is experiencing significant challenges, with a stock price decline of 12.1% over the past six months, underperforming compared to the industry and broader consumer staples sector [1][5]. Stock Performance - CLX's stock closed at $139.82, remaining below its 200-day and 50-day simple moving averages (SMAs) of $152.40 and $143.99, respectively, indicating a potential sustained downward trend [3][4]. - Compared to competitors, CLX's performance is weaker, with Colgate-Palmolive and Procter & Gamble experiencing declines of 9.1% and 4.7%, respectively, while Church & Dwight saw a growth of 1.3% [5]. Financial Performance - In Q2 of fiscal 2025, Clorox's revenues and earnings exceeded the Zacks Consensus Estimate, but revenues still declined by 15% year-over-year due to broad-based declines across key business segments [9]. - Revenue declines were reported in Health and Wellness (13%), Household (11%), Lifestyle (16%), and International (12%) segments, primarily due to volume contraction [9]. Future Outlook - Management has provided a cautious outlook for fiscal 2025, projecting net sales growth between -1% and 2%, with gross margin growth expected to be offset by cost inflation and increased trade promotional expenses [10]. - Clorox plans to invest 11-11.5% of net sales in advertising and sales promotion, with selling and administrative expenses forecasted at 15-16% of net sales [10]. Earnings Estimates - The Zacks Consensus Estimate for Clorox's earnings per share (EPS) for fiscal 2025 is stable at $7.15, while the estimate for fiscal 2026 has decreased by 0.6% to $7.08 [11]. Strategic Initiatives - Clorox is implementing its IGNITE strategy to accelerate profitable growth and enhance long-term success, focusing on expanding key business elements and driving innovation [13]. - The company has streamlined its operating model to improve efficiency and profitability, resulting in meaningful improvements in gross margin [14]. - Clorox is investing $560-$580 million in transformative technologies over the next few years, with 70% of these costs tied to ERP implementation [16]. Valuation - Clorox is currently trading at a forward 12-month P/E ratio of 19.71, below the industry average of 20.2 and the S&P 500's average of 20.05 [19]. - The lower valuation may suggest an attractive entry point but could also reflect investor concerns regarding potential underlying challenges within the business [20].

Group 1 - The Clorox Company will release its third-quarter fiscal year 2025 results on May 5, 2025 [1] - The announcement will include a press release and prepared management remarks posted on the company's website at 1:15 p.m. PT / 4:15 p.m. ET [3] - A live Q&A audio webcast for analysts will take place at 2 p.m. PT / 5 p.m. ET with Chair and CEO Linda Rendle and Chief Financial Officer Luc Bellet [3] Group 2 - Clorox is headquartered in Oakland, California, and has been in operation since 1913 [2] - The company integrates ESG into its business reporting and was ranked No. 1 on Barron's 100 Most Sustainable Companies list for the third consecutive year in 2025 [2] - Clorox's trusted brands include Brita®, Burt's Bees®, Clorox®, Fresh Step®, Glad®, Hidden Valley®, Kingsford®, Liquid-Plumr®, and Pine-Sol®, along with international brands such as Clorinda®, Chux®, and Poett® [2]

Core Insights - Hidden Valley Ranch is launching seven new flavors to enhance its product offerings, aiming to elevate meal and snack experiences [1][2] - The brand is introducing a redesigned Easy Squeeze bottle for a mess-free and user-friendly experience [2][6] Product Innovations - New flavors include: - Blue Cheese Ranch - Kickin' Cajun Blackened Ranch - Cilantro Lime Ranch - Cracked Pepper Ranch - Sweet BBQ Ranch - Garlic Ranch Seasoning - Creamy Jalapeno Ranch Seasoning [2][5] - The Kickin' Cajun Blackened Ranch will be available exclusively at Kroger, while Blue Cheese Ranch, Sweet BBQ Ranch, and Cracked Pepper Ranch will be exclusive to Walmart [2] Packaging Redesign - The new Easy Squeeze bottle features: - Improved Flow Control Cap for mess-free pouring - Inverted design to reduce waste and enhance usability [6]

Core Insights - Companies like Sherwin-Williams, McDonald's, and Clorox are recognized for their long-term dividend growth, making them attractive for passive income investors [2][15]. Sherwin-Williams - Sherwin-Williams has been included in the Dow Jones Industrial Average, highlighting its consistent performance and diverse revenue streams [3]. - The company operates through three segments: Paint Stores Group (57% of revenue), Performance Coatings Group (29%), and Consumer Brands Group (14%) [3][5]. - The Paint Stores Group primarily serves the U.S. market, while the Performance Coatings Group focuses on industrial clients [4]. - Sherwin-Williams has a strong operating margin across its segments, with 22% for Paint Stores, 21% for Consumer Brands, and 18% for Performance Coatings [5]. - The company announced its 46th consecutive annual dividend increase, positioning it to become a Dividend King by 2029 [6]. - Despite a high price-to-earnings (P/E) ratio of 33.1 and a low yield of 0.9%, Sherwin-Williams is considered a premium investment due to its industry leadership [7]. McDonald's - McDonald's has shown resilience, with an 8% year-to-date increase in stock price, outperforming major indexes [8]. - The company's business model relies heavily on franchising, with 95% of its restaurants being franchised, providing stable cash flow [9]. - McDonald's has paid a growing dividend for 48 consecutive years, with a manageable payout ratio under 60% and a yield of 2.3% [10]. - Over the past decade, McDonald's stock price has increased by 220%, while the share count has decreased by over 25% due to buybacks [10]. Clorox - Clorox has faced challenges in growth but is undergoing a turnaround that may benefit long-term investors [11]. - The company has a diverse brand portfolio but has struggled with supply chain management and cost control [12]. - Clorox is making investments in digital technologies and transitioning to a cloud-based platform to improve efficiency [13]. - Management projects adjusted earnings per share for fiscal 2025 to be between $6.95 and $7.35, resulting in an adjusted P/E ratio of 20.6 [14]. - Clorox offers a 3.3% dividend yield and has increased its dividend for 40 consecutive years, making it appealing for value investors [14].

Core Viewpoint - Clorox (CLX) is positioned well to continue its trend of beating earnings estimates, with a strong history of performance in recent quarters [1][4]. Earnings Performance - In the most recent quarter, Clorox reported earnings of $1.55 per share, exceeding the expected $1.39 per share, resulting in a surprise of 11.51% [2]. - For the previous quarter, Clorox's earnings were $1.86 per share against an expectation of $1.36 per share, leading to a surprise of 36.76% [2]. Earnings Estimates and Predictions - Recent estimates for Clorox have been increasing, with a positive Earnings ESP (Expected Surprise Prediction) of +1.37%, indicating bullish sentiment among analysts regarding the company's earnings prospects [4][7]. - The combination of a positive Earnings ESP and a Zacks Rank of 3 (Hold) suggests a high likelihood of another earnings beat [7]. Statistical Insights - Research indicates that stocks with a positive Earnings ESP and a Zacks Rank of 3 or better have a nearly 70% chance of producing a positive surprise [5]. - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the Most Accurate Estimate reflecting the latest analyst revisions [6].