Clorox CFO Expects Debt Leverage to Rise to 3.6x
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 6d ago
0mins
In Conference Call accompanying Gojo Industries deal, CFO Luc Bellet says: "Our debt leverage will increase to 3.6x. And we are confident that we can take this down to 2.5x by the end of calendar year 2027. And so I think given the combination of Clorox and actually GOJO's strong cash flows as well as we have the benefit of anticipated tax benefits in the first 2 years that will be fairly material, that will help us repay some of the debt, and we're confident that we will reach our target leverage ratios while being able to continue to support the dividends. So I would say near term, like balance sheet discipline and deleveraging as well as supporting dividend is really our priority, and I will take priority over share repurchase. So we do not expect to make any share repurchase until we reach our targeted debt-to-EBITDA ratio."
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Analyst Views on CLX
Wall Street analysts forecast CLX stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for CLX is 118.09 USD with a low forecast of 94.00 USD and a high forecast of 152.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
12 Analyst Rating
1 Buy
9 Hold
2 Sell
Hold
Current: 108.800
Low
94.00
Averages
118.09
High
152.00
Current: 108.800
Low
94.00
Averages
118.09
High
152.00
About CLX
The Clorox Company is a multinational manufacturer and marketer of consumer and professional products. The Company operates through four segments: Health and Wellness, Household, Lifestyle, and International. Its Health and Wellness segment consists of cleaning, disinfecting and professional products marketed and sold under the Clorox, Clorox2, Pine-Sol, Scentiva, Tilex, Liquid-Plumr and Formula 409 brands in the United States. Its Household segment consists of bags and wraps, cat litter and grilling products marketed and sold under the Glad, Fresh Step and Scoop Away, and Kingsford brands in the United States. The lifestyle segment consists of food, water-filtration and natural personal care products marketed and sold under the Hidden Valley, Brita and Burt’s Bees brands. International consists of products sold outside the United States. Its products within this segment include laundry additives, home care products, bags and wraps, cat litter, water-filtration products and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Clorox Acquires GOJO for $2.25 Billion to Strengthen Health Segment
- Acquisition Announcement: Clorox plans to acquire GOJO Industries for $2.25 billion in cash, aimed at strengthening its market presence in the health and hygiene sector, with the deal expected to close before the end of fiscal 2026.
- Valuation Adjustment: Deutsche Bank raised Clorox's price target from $110 to $114 while maintaining a Hold rating, reflecting market recognition of its acquisition strategy.
- Cost Synergies: Management anticipates achieving at least $50 million in annual cost synergies post-acquisition, which will enhance Clorox's profitability and operational efficiency.
- GOJO Valuation: The transaction values GOJO at $1.92 billion, with approximately $330 million linked to expected tax benefits, indicating Clorox's focus on future growth potential.
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Clorox Agrees to Pay $14.15M Penalty for Product Defect Reporting Failure
- Penalty for Product Defect: Clorox has agreed to pay a $14.15 million penalty to the U.S. Consumer Product Safety Commission for failing to promptly report a defect in its Pine-Sol products, indicating a significant compliance failure that could tarnish the company's brand reputation.
- Bacterial Contamination Risk: In 2019, Clorox scientists reported that Pine-Sol products may have contained the pathogenic bacteria Pseudomonas aeruginosa, which poses serious infection risks to individuals with weakened immune systems, highlighting deficiencies in the company's product safety management.
- Compliance Measures Required: In addition to the penalty, Clorox must implement internal controls to ensure compliance with the Consumer Product Safety Act and submit an annual report detailing its compliance program and internal audits, reflecting the stringent requirements imposed by regulators on corporate compliance.
- Safety Risk Warning: CPSC acting chairman Peter Feldman emphasized that prompt reporting of safety risks saves lives, and Clorox's case serves as a reminder to other companies of their legal responsibilities regarding product safety, potentially leading to a stricter regulatory environment.
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