The Clorox Company ( CLX Quick Quote CLX - Free Report) have gained 23.5% in the past year, thanks to strength in its IGNITE strategy, which aims at driving overall growth and hence boosting shareholder value. Strong consumer demand for its products has been further boosting its performance. In fact, the company is likely to continue benefiting from elevated demand for cleansing products, including disinfecting items, amid the pandemic. The company’s cost-containment actions and productivity initiatives also bode well. Notably, the cost-savings program has meaningfully contributed to year-over-year gross-margin expansion for the eighth consecutive time in first-quarter fiscal 2021. As a result, the Zacks Rank #3 (Hold) stock has outshined the industry’s 7.6% rally. The VGM Score of A and expected long-term earnings growth of 7.3% are added strengths. Robust Strategies
Clorox is on track with its IGNITE strategy. This integrated strategy is formulated on a sturdy foundation of its 2020 strategy and mainly focuses on the expansion of key elements to pace up innovation in each area of business. Clorox has chalked out four strategic choices, namely, fuel growth; develop portfolio; innovate experiences; and reimagine operations.
Markedly, IGNITE’s main principle is ‘Innovating for Good Growth’, delivering sustainable and responsible growth. The strategy encompasses the long-term financial targets of achieving net sales growth of 2-4%, EBIT margin expansion of 25-50 basis points and free cash flow generation of 11-13% of sales. Moreover, the company is witnessing strong progress in the core International business. Driven by its IGNITE strategy that targets improving profitability in international business, the company expects to invest selectively in profitable platforms.
Although Clorox is seeing higher manufacturing and logistics expenses, including pandemic-related costs and increased selling and administrative expenses, its cost-controlling actions are noteworthy. Backed by the IGNITE strategy, Clorox aims at higher cost savings annually by emphasizing more on technology and integrated design. Further, the company’s cost-based pricing strategy has enabled it to address the inflationary environment. These cost-saving and pricing actions should continue to support its investment in brands and category growth. What Awaits
The aforementioned factors is likely to help Clorox maintain its earnings surprise streak for the seventh straight quarter, when it reports second-quarter fiscal 2021 results on Feb 4. According to the Zacks Model, the combination of a positive
Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 increases the chance of an earnings beat to roughly 70%. Going by this, Clorox is likely to beat earnings estimates this reporting cycle. This is because the company presently has an Earnings ESP of +0.71% coupled with a favorable Zacks Rank. You can see . the complete list of today’s Zacks #1 Rank stocks here In fact, the Zacks Consensus Estimate for the impending quarter’s earnings is currently pegged at $1.66, up 2 cents in the past 30 days and suggests an improvement of 13.7% from the year-ago quarter. Further, the Zacks Consensus Estimate for revenues is pegged at $1.74 billion for the fiscal second quarter, suggesting growth of more than 19% from the year-ago quarter’s tally. Key Stocks to Consider Church & Dwight ( CHD Quick Quote CHD - Free Report) has an expected long-term earnings growth rate of 9% and a Zacks Rank #2. Procter & Gamble ( PG Quick Quote PG - Free Report) has an expected long-term earnings growth rate of 7.9% and a Zacks Rank #2. Colgate ( CL Quick Quote CL - Free Report) , also a Zacks Rank #2 stock, has a long-term earnings growth rate of 6.6% and a Zacks Rank #2. Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better. See these 7 breakthrough stocks now>>