Clorox's (CLX) risk-reward profile for fiscal 2027 is balanced despite the benefits from the GOJO deal and the transition to a new Enterprise Resource Planning system, given the heightened inflation cost outlook, BofA Securities said in a Monday note.
The company reported fiscal Q1 adjusted earnings late Monday of $1.55 per diluted share on revenue of $1.91 billion. Analysts polled by FactSet expected EPS of $1.07 on revenue of $1.88 billion.
Costs are expected to pressure the company's gross margin in fiscal Q2 and 2027, with inflation projected to reach around $240 million in fiscal 2027, which is $40 million more than the initial outlook assuming an oil price of $100 per barrel, according to the note.
BofA updated its adjusted EPS forecasts, lowering its fiscal Q2 estimate to $1.05 from $1.47 and raising its fiscal 2027 and fiscal 2028 estimates to $5.78 from $5.75 and $6.41 from $6.36, respectively.
BofA maintained the company's stock rating at neutral and adjusted the price target to $96 from $100.
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