Church & Dwight's (CHD) exit from the slower-growing VMS business is expected to sharpen its focus on power brands and innovation, supported by strong Q4 results and a positive outlook for 2026, RBC Capital said in a Monday note.

The company expects net sales to decline by 0.5% to 1.5% due to divestitures, while organic sales are projected to grow 3% to 4%, supported by market share gains and momentum in its Touchland hand sanitizer brand, the report said.

The company expects adjusted earnings per share for 2026 to be in the $3.71 to $3.81 range, representing 5% to 8% growth, with Q1 adjusted EPS anticipated at $0.92. Analysts surveyed by FactSet expect $3.76 for 2026 and $0.93 for Q1.

Gross margins are forecast to rise about 100 basis points from productivity, portfolio optimization, and volume/mix gains, while marketing and selling, general, and administrative expenses are expected to remain higher in H1 due to Touchland investments, the report said.

The firm maintained its outperform rating on the stock with a price target of $114.

Shares of Church & Dwight were up 1% in recent trading.

Price: 97.19, Change: +0.89, Percent Change: +0.92