Morgan Stanley Trims Clorox (CLX) Price Target After Soft Q1 Performance

Core Insights - The Clorox Company (NYSE:CLX) has faced challenges in its fiscal Q1 2026 performance, leading to a price target reduction by Morgan Stanley from $137 to $125 while maintaining an Equal Weight rating [2] - The company reported a revenue of $1.43 billion, a 19% decline year-over-year, primarily due to reduced shipments related to its ERP transition [2] - CEO Linda Rendle emphasized the importance of the new ERP system rollout, which is expected to enhance operational efficiency and create new value opportunities despite the current challenges [3] Financial Performance - Fiscal Q1 2026 revenue was $1.43 billion, down 19% from the previous year [2] - Organic sales fell by 17%, attributed to lower volume linked to the ERP transition [2] - Gross margin decreased by 410 basis points to 41.7%, compared to 45.8% a year ago, impacted by lower volume and increased manufacturing and logistics costs [2] Management Outlook - Management anticipates organic sales to decline at a low single-digit pace in the first half of the fiscal year, with a potential rise in the second half, excluding ERP transition effects [3] - CFO Luc Bellet projected subdued growth in the US retail category, estimating growth between 0% and 1%, which is below the long-term trend [4] Product Portfolio - The Clorox Company is recognized for its cleaning and disinfecting products, alongside a diverse range of consumer and professional items, including household cleaning, laundry, and health and wellness products [4]