- Credit Suisse analyst Kaumil Gajrawala downgraded Clorox Co CLX to Underperform from Neutral with a $160 price target.
- The analyst thinks a large portion of Clorox’s growth during the first phase of the pandemic came from categories that are now declining.
- If consumption continues to revert toward pre-pandemic levels, $500 million in company sales may still be at risk, Gajrawala notes.
- The analyst also believes margins may take longer to recover due to uncertainty around pricing and elasticities.
- If consumption weakens further amid high input cost inflation, a drop in volumes could result in material de-leverage to margins, the analyst adds.
- Price Action: CLX shares are trading lower by 4.84% at $166.08 on the last check Wednesday.
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