The firm said it lowered its rating on the consumer and professional products manufacturer and marketer "given the still tough macro backdrop and intense competitive activity that is pressuring both growth and Clorox's market shares in many of the company's product categories."
B. Riley also downgraded Clorox to "sell" from "neutral," as it believes the company will not be acquired and has weak fundamentals.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
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 few notable 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 good cash flow from operations, expanding profit margins, increase in stock price during the past year 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:
- Net operating cash flow has increased to $337.00 million or 16.20% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -0.55%.
- 45.40% 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 11.25% trails the industry average.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 5.8%. Since the same quarter one year prior, revenues slightly dropped by 2.3%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- CLOROX CO/DE's earnings per share declined by 5.8% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, CLOROX CO/DE reported lower earnings of $4.27 versus $4.32 in the prior year. This year, the market expects an improvement in earnings ($4.42 versus $4.27).
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- You can view the full analysis from the report here: CLX Ratings Report