Clorox (CLX:NYS) Fundamental Valuation Report

Fundamental Valuation Report

Clorox(CLX:NYS)

Consumer Defensive:Household & Personal Products

This Report was generated using the valuation tools available on StockCalc.com. For a free 30 day trial click here.

Close Price/Date
$152.96 (USD) 24/10/2018

Weighted Valuation
$133.32 (USD)

Overall Rating
Overvalued by 12.8%

Valuation Models Analyst Consensus: $125.50 (USD)
(in order of importance) Discounted Cash Flow: $147.91 (USD)
Comparables: $127.60 (USD)
Valuation Methods This company is:
Cash Flow: Fairly valued on a Cash Flow Valuation
Comparable Company: Overvalued on a Comparable Valuation
Asset: Undervalued on an Asset Valuation

Company Overview (CLX:NYS USD)

Price 152.96
Range 150.32 – 155.23
52 week 114.80 – 152.96
Open 150.59
Vol / Avg. 1.07M/942748
Mkt cap 19.53B
P/E 24.43
Div/yield 3.48/0.02
EPS 6.26
Shares 127.69M
Beta 0.36

Company Description

With a history dating back more than 100 years, Clorox now sells a variety of consumer staples products, including cleaning supplies, laundry detergents, trash bags, cat litter, charcoal, food dressings, water-filtration products, and natural personal-care products. Beyond its namesake brand, the firm’s portfolio includes Liquid-Plumr, Pine-Sol, SOS, Tilex, Green Works, Kingsford, Fresh Step, Glad, Hidden Valley, KC Masterpiece, Brita, and Burt’s Bees. Nearly 85% of Clorox’s sales are derived from its home turf.

Valuation Details

 We have up to 6 valuation points for each company. Details are at the bottom of the report.

Discounted Cash Flow and Sensitivity Analysis for CLX:NYS

Using a discounted cash flow model we generated an intrinsic value of $147.91 (USD) for CLX:NYS

Sensitivity Analysis

(showing how changes in the input variables impact the DCF calculation)

CLX:NYS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $147.91 1% 5% 1% 5%
WACC (or Ke) 5.27 $189.98 $119.93
Terminal Growth Rate 0.30 $122.48 $186.15
Tax Rate 0.22 $158.83 $136.99
Cash Flow 1,400,589,200 $139.37 $156.45
Capital Expenditures 0 $147.91 $147.91
Long Term Debt 2,407,000,000 $148.85 $146.97

* Changes are absolute: ex WACC from 8% to 7%

Comparables Model

Using similar companies and price based ratios we generated a valuation of $127.60 (USD) for CLX:NYS. We also generated a valuation of $96.10 (USD) using other metrics and comparables.
The comparable companies were Church & Dwight Co (CHD:NYS), Colgate-Palmolive (CL:NYS), The Estee Lauder Cos (EL:NYS), Kimberly-Clark (KMB:NYS) and Newell Brands (NWL:NYS).

Company CLX:NYS End Date Value
Earnings/Share $6.26 (USD)
Book Value/Share $5.69 (USD)
Sales/Share $46.54 (USD)
Cash Flow/Share $7.40 (USD)
EBITDA/Share $9.92 (USD)
Price Based on Comps Adjustment Factor (%)
$153.29 (USD) -9.6
$35.26 (USD) 0.0
$133.19 (USD) 31.1
$109.97 (USD) 4.5
$151.00 (USD) 17.2
CLX:NYS Ratios Used Average Values CHD:NYS CL:NYS EL:NYS KMB:NYS NWL:NYS
24.03 PE Ratio 24.49 18.38 26.78 49.26 23.19 4.82
26.45 PB Ratio 6.20 6.56 0.00 11.36 0.00 0.69
3.23 PS Ratio 2.86 3.71 3.74 3.99 2.17 0.70
20.32 PCF Ratio 17.40 19.83 19.36 21.22 13.38 13.24
16.52 EV to EBITDA 15.23 17.51 14.94 20.49 13.87 9.31

Multiples

Using a multiples approach we generated a valuation of  $178.60 (USD) for CLX:NYS

Company CLX:NYS End Date Value
Earnings/Share $6.26 (USD)
Book Value/Share $5.69 (USD)
Sales/Share $46.54 (USD)
Cash Flow/Share $7.40 (USD)
EBITDA/Share $9.92 (USD)
Price Based on Comps Adjustment Factor
$156.73 (USD) 0
$314.90 (USD) 0
$132.70 (USD) 0
$145.06 (USD) 0
$143.59 (USD) 0
Ratios Ratio Average
PE Ratio 25.04
PB Ratio 55.39
PS Ratio 2.85
PCF Ratio 19.60
EV to EBITDA 14.48

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  CLX:NYS for the last 8 years was  54.20

We ran the Adjusted Book Value for  CLX:NYS and generated a book value of  $5.67 (USD)
By multiplying these we get an adjusted valuation of  $307.46 (USD)

Analyst Data

In the Stockcalc database there are 4 analysts that provide a valuation for CLX:NYS. The 4 analysts have a concensus valuation for CLX:NYS for 2019 of $125.50 (USD).

CLX:NYS Clorox

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
1 2 2 2.5000 Underperform 2018-10-23

Current Price: 152.96 USD

Analyst Consensus
USD Millions 2019 2020 2021
Mean EPS 6.45 6.90 6.86
# EPS Analysts 6 6 1
Mean Revenue 6,299.20 6,491.00 6,548.40
# Revenue Analysts 4 4 1
Mean Target Price 125.50
Mean Cash Flow 8.03 8.45 8.64
Mean EBITDA 1,336.50 1,399.80 1,396.40
Mean Net Income 816.50 838.10 849.20
Mean Debt Outstanding
Mean Tax Rate 23.00 23.50
Mean Growth Rate 5.73
Mean Capital Expenditure 219.50 226.40 229.20

Explanation of Valuation Models

We have up to 6 valuation points for each company in the database.

The Discounted Cash Flow (DCF) valuation is a cash flow model where cash flow projections are discounted back to the present to calculate value per share. DCF is a common valuation technique especially for companies undergoing irregular cash flows such as resource companies (mining, forestry, oil and gas) going though price cycles or smaller companies about to generate cash flow (junior exploration companies, junior pharma, technology firms…).

The Price Comparables valuation is the result of valuing the company we are looking at on the basis of ratios from selected comparable companies: Price to Earnings, Price to Book, Price to Sales, Price to Cash Flow, Enterprise Value (EV) to EBITDA. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

We have included the Other Comparables as a way to value companies that cannot be valued using Earnings based ratios. This technique is very useful for companies still experiencing negative cash flows such as mining exploration firms. We use Cash/Share, Book Value/Share, MarketCap, 1 Year Return, NetPPE as the ratios here. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

Multiples are similar to Price comparables where we look at current or historic ratios for the company in question to assess what it should be worth today based on those historic ratios. We use the same 5 ratios as in the price comparables and value the company with its historic averages.

With Adjusted Book Value (ABV) we calculate the book value per share for the company based on its balance sheet and multiply that book value per share by its historical price to book ratio to calculate a value per share.

If we have Analyst coverage for the company we use the consensus target price here.

Notice to User


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