The Clorox CLX
Consumer Defensive · Household & Personal Products · Synthos Deep Dive · 2026-07-03
The Overview
Clorox makes the everyday household stuff you already know: Clorox bleach and wipes, Glad trash bags, Kingsford charcoal, Brita filters, Burt's Bees, Hidden Valley Ranch, and — as of April 2026 — Purell hand sanitizer. It's the definition of a "boring, defensive" business: people buy these products in good times and bad.
Is the stock cheap or expensive? About fairly priced — neither a bargain nor a bubble. You're paying roughly what it's worth. The main reason to own it is the dividend of about 5% a year, which is real cash in your pocket.
The verdict is Watch: a fine, steady company, but it's barely growing — sales have been stuck around $7 billion for ten years, and this year management expects sales to actually shrink. So there's little reason to expect the stock price to climb much.
Here's what the three scores mean in everyday terms:
- Downside Risk 6/10 (a bit above average). The stock doesn't swing wildly and demand is stable, but the company carries meaningful debt, has been buying back so much stock its book value went negative, and the shares have already fallen a lot from their peak.
- Growth Quality 3/10 (weak). Profitable and well-run, but it simply isn't growing — sales are flat and shrinking this year.
- Exponential Potential 1/10 (essentially none). This is a mature company in mature markets. Do not expect it to multiply your money; expect a steady dividend and slow drift.
The one big worry: shoppers keep trading down to cheaper store-brand ("private label") versions, and Clorox's markets aren't growing — so the company has to fight just to stay flat, while paying out most of its profit as dividends leaves little to reinvest.
Putting a number on it: our fair-value estimate is $103 against a current price of $102.53 — real upside if our numbers are right.
Our summary metrics
Low beta (0.53) & staple demand, but 2.5× net-debt/EBITDA, negative book equity, 5% yield near 90% payout, and a −59% peak drawdown.
~7% forward EPS CAGR off a depressed FY26 trough; revenue essentially flat 5yr; ROIC ~17% but organic sales shrinking ~9% this year.
A mature, ex-growth staple — TAM saturated, sales flat for a decade, no acceleration. This is a compounder-at-best, never an exponential.
What does “fair value” mean?
Fair value is Synthos’s estimate of what one share is worth today, based on our model of the company’s future cash generation and the risks to it. It is not a price target or a prediction of where the stock trades next quarter — it’s the price where we think risk and reward are balanced. Above it, you’re paying for outcomes better than our base case; below it, the market is offering a margin of safety.
The model’s inputs and weightings are proprietary — they’re the product. What we publish is the output, plus an independent, public-math cross-check further down the page (“Check our number”) so you can judge it for yourself.
What do the 5 tiers mean? (Core · Tactical · Watch · Hold · Avoid)
Exponential Potential
A mature, ex-growth staple — TAM saturated, sales flat for a decade, no acceleration. This is a compounder-at-best, never an exponential.
What could take this further than the base case — and where the market may be underpricing it. Full forward-growth and acceleration math in Deeper analysis, §4 below.
Deeper analysis
Technicals, fundamentals, valuation, and the full expert-claim evidence panel — the detail behind the numbers above.
Reference table
| Street consensus | $105.5 (high $139 / low $83; 0 Strong Buy · 4 Buy · 18 Hold · 6 Sell) — context, not our anchor |
| Valuation | 15.7× trailing EPS · ~17.6× FY26E · 15.7× FY27E · 13.3× FY30E · EV/S 2.2× · EV/EBITDA 11.5× |
| Dividend | ~5.1% yield, $4.96/yr, ~80% TTM payout — the core reason to own it |
| Technicals | Downtrend — $97, −26% off 52-wk high, below the 200-DMA, RSI 48, −21% 12-mo (SPY +21%) |
| Conviction | Low / none — 0 expert voices in the Synthos KB; call rests entirely on fundamentals & quant |
| Position sizing | Income sleeve only, ~1–2% if owned for the dividend; not a growth holding |
What the experts actually said
No independent expert claims in the Synthos knowledge base yet for CLX — this dive is fundamentals- and technicals-driven, not panel-driven.
Price & moving averages 12 months · 50 & 200-day averages · 52-week range
Solid line = price · dashed line = 50-day average · dotted line = 200-day average · the two thin horizontal lines mark the 52-week high and low. Price above both averages is an uptrend.
Data summary: last close $102.53, 3% above the 50-day average ($100), 1% below the 200-day average ($103) — a mixed trend. 19% below the 52-week high of $127, 19% above the 52-week low of $86.
Bollinger Bands 20-day average ± 2 standard deviations
The shaded band widens when the stock gets more volatile. Riding the upper edge = strong momentum (sometimes stretched); the lower edge = weak / potentially oversold.
Data summary: price $102.53 is currently inside the band (band $101–$110).
RSI (14) momentum gauge · 0–100
Above 70 (overbought zone, shaded) = overbought, below 30 (oversold zone, shaded) = oversold. Currently 48.
MACD 12 / 26 / 9 · trend & momentum
The MACD line crossing above the signal line (bars flip to the up color) = momentum turning up; crossing below (bars flip to the down color) = turning down. Bar height = the size of that gap.
Data summary: MACD is currently below its signal line by 0.72, negative momentum.
Relative performance vs S&P 500 & its sector (XLP (sector)), set to 100 a year ago
Solid = CLX · dashed = S&P 500 · dotted = XLP (sector). A rising line means it is beating that benchmark — the sector line shows whether it is a leader or laggard within its own group.
Forward revenue & earnings actual → estimate · "FY" = fiscal year, "E" = estimate
Darker bars = actual results, brighter = analyst estimates. Taller bars to the right = expected growth.
Key stats an RIA wants
1. What it is
The Clorox Company (NYSE: CLX) is a ~110-year-old (founded 1913) global maker of consumer and professional household products, headquartered in Oakland, CA, run by CEO Linda Rendle. Fiscal year ends June 30. It reports four segments:
Revenue by segment (FY2025, from filings):
- Health and Wellness (Clorox cleaning/disinfecting, Pine-Sol, Liquid-Plumr, CloroxPro, Clorox Healthcare, now Purell/GOJO): $2.70B (38%)
- Household (Glad bags & wraps, Kingsford charcoal, Fresh Step / Scoop Away cat litter): $2.00B (28%)
- Lifestyle (Hidden Valley dressings, Burt's Bees natural personal care, Brita filtration): $1.30B (18%)
- International (products sold outside the US): $1.07B (15%)
By geography (FY2025): United States $6.08B (~86%) · Foreign $1.02B (~14%). This is an overwhelmingly US-domestic business — a stability strength but with little geographic growth diversification.
The strategic story of the moment is threefold: (a) a multi-year ERP/digital transformation that has distorted shipment timing (the swing factor in FY25→FY26 comparisons), (b) the April 2026 acquisition of GOJO Industries, adding the Purell hand-sanitizer franchise, and (c) an ongoing effort to recover market share lost after the 2023 cyberattack and post-COVID demand normalization.
2. The expert thesis — why the panel is bullish (traceable)
There is none in the Synthos KB. The expert-claims file for CLX shows total_claims: 0, net_bullish_voices: 0, and an empty top array. No Synthos-tracked expert voice — bull or bear — currently covers Clorox.
What this means for the verdict: unlike a conviction-track name, this call is entirely fundamentals- and quant-driven. There is no independent expert breadth to lean on, and — per house standard — we will not manufacture conviction we do not have. The absence of coverage is itself mildly informative: Clorox is a slow, well-understood staple that the high-alpha voices Synthos tracks simply aren't excited about. Treat every judgment below as our own model reconciled to the reported financials and Street estimates, nothing more.
3. Synthos scores & the Bull / Base / Bear cases
The one-glance judgment — three scores, 0–10, each anchored to real metrics (not probabilities we can't honestly calibrate):
| Score | 0–10 | The read |
|---|---|---|
| Downside Risk (lower = safer) | 6 · Moderate-High | Low beta (0.53) and staple demand cut both ways, but net-debt/EBITDA 2.5×, negative book equity (buybacks + goodwill), a ~5% dividend at a ~80–90% payout, and a −59% max drawdown from peak are real fragility. Not a fortress balance sheet. |
| Growth Quality | 3 · Weak | ROIC ~17% and 44% gross margin show quality operations, but revenue has been flat at ~$7B for a decade and FY26 is guided down ~6% (organic −9%). Forward EPS CAGR is only ~7% and that's off a depressed trough. |
| Exponential Potential | 1 · Very Low | Mature company, saturated categories, no acceleration — the second derivative is flat-to-negative. There is no honest path to a multibagger here. |
The three cases (our own scenario model — assumptions shown; each target is a ~12–18-month fair value). We deliberately do not attach probabilities: the base case is by definition the expected path, so a weighted blend would just restate it with false precision. The cases bound the range; the scores above summarize them.
| Case | Key assumptions | Fair value |
|---|---|---|
| Bull | ERP disruption fully laps, Purell/GOJO integrates cleanly and accretes, market-share recovery takes hold, margin rebuilds toward 45%+. FY27E EPS beats to ~$6.75; multiple re-rates to a staple-premium ~19×. | ~$128 (+32%) |
| Base (our anchor) | FY26 trough (EPS ~$5.53) gives way to a normalized recovery; FY27E EPS ~$6.20 (consensus); a flat-to-low-single-digit grower with a secure ~5% yield earns a ~16.5× forward multiple. | ~$103 (+6%) |
| Bear | Private-label share loss persists, organic declines don't reverse, GOJO integration disappoints, margins stay pressured by input/logistics/energy costs. FY27E EPS misses to ~$5.70; multiple de-rates to ~14×. | ~$80 (−18%) |
Synthos fair value = the base case, ~$103 (+6%), with the full $80–$128 span as the honest range. This anchor sits essentially on top of the Street's $105.5 consensus — we see no informational edge that justifies deviating, and a modest ~6% upside plus a ~5% dividend is a total-return story, not a capital-appreciation one. This is a tracked call — the Forecaster Scorecard grades it once it matures.
4. Exponential Potential
Synthos separates compounders (durable high returns on capital) from exponentials (accelerating multi-baggers-from-here). CLX is neither an exponential nor even a fast compounder — it is a mature, ex-growth staple:
- Forward growth: revenue CAGR is roughly flat-to-low-single-digit — estimates put FY26 at ~$6.68B (a guided decline), recovering to only ~$8.22B by FY30E, i.e. still barely above the ~$7B the company did in FY2021. A decade of flat revenue. EPS CAGR FY26E→FY30E is ~7%, but that is arithmetic off a depressed FY26 trough — normalized growth is low-single-digit.
- Acceleration (the 2nd derivative) is negative: FY26 organic sales are guided down ~9%; even stripping the ~7.5-point ERP-shipment reversal, the underlying category is not accelerating. There is no inflection here — the opposite.
- Room to run: the household-products TAM in Clorox's categories is saturated and slow-growing; at an ~$12B market cap the "room" isn't the constraint — demand growth is. You cannot 3× a bleach-and-trash-bag franchise; the categories don't grow.
- Reinvestment runway: limited by design — a ~80–90% dividend payout means most cash returns to shareholders rather than compounding inside the business.
Exponential Potential: Very Low (1/10). Own CLX for a defensive ~5% yield and low volatility, never for growth. This is the honest opposite of a flagship next-exponential.
5. Financials (real numbers — FMP annual/quarterly)
- Revenue: FY25 (ended 6/30/25) $7.10B, essentially flat vs FY24 $7.09B and below FY23 $7.39B. The five-year picture is flat: $6.72B (FY20) → $7.34B (FY21) → $7.11B → $7.39B → $7.09B → $7.10B. No secular top-line growth.
- FY26 in progress (the distortion year): Q1 $1.43B, Q2 $1.67B, Q3 $1.67B — running below prior-year on the ERP-shipment reversal. Management guides full-year net sales down ~6%, organic down ~9% (see §9).
- Margins: gross 43.8% TTM (down from ~46% pre-COVID; Q3 FY26 43.2%, −140bps YoY on higher manufacturing/logistics costs); EBITDA margin ~19.4%; net margin 11.2% TTM. FY25 net income $810M rebounded sharply from the depressed FY23 ($149M) and FY24 ($280M) — those years were hit by the 2023 cyberattack and impairments.
- Earnings: FY25 EPS $6.52 diluted (net income $810M). TTM EPS ~$6.23. Note the volatility: FY23 EPS was $1.20, FY24 $2.25 — this franchise has had a bumpy, not smooth, earnings record.
- Cash flow: FY25 operating CF $981M, capex −$220M, FCF $761M (FCF yield ~3.2%). But FY26 YTD operating cash flow fell to $282M from $687M — a 59% drop — largely on a Glad JV termination payment. FCF comfortably covers the ~$600M dividend in a normal year, but the cushion is thinner than the yield suggests.
- Balance sheet: total debt $2.88B, net debt $2.71B, net-debt/EBITDA ~2.5× — meaningful leverage for a staple. Total stockholders' equity is a slim $321M and book value per share is effectively negative on a tangible basis (−$9.77 tangible BVPS) after years of buybacks against goodwill/intangibles of ~$1.8B. Current ratio 0.84 (below 1). This is a leveraged-equity capital structure, not a conservative one.
6. Valuation — priced in or room?
CLX is roughly fairly valued. Trailing 15.7× EPS, 11.5× EV/EBITDA, and 2.2× EV/sales are all near the low end of the household-products peer range — appropriate for a no-growth name. On forward estimates the P/E is ~17.6× (FY26E, trough) → 15.7× (FY27E) → 13.3× (FY30E) — the multiple looks cheaper on out-years mainly because FY26 EPS is depressed by the ERP reversal, not because earnings are compounding fast.
The PEG is unfavorable (~1.5–1.9×) precisely because growth is so slow: you are not being paid to wait via appreciation. The real return here is the ~5.1% dividend, and the total-return case is roughly "5% yield + low-single-digit earnings growth + ~6% to fair value." FMP's letter rating is "B" (overall score 3/5) with weak marks on ROE-adjusted-for-leverage, debt/equity, and price/book — consistent with our read.
Street targets (context, not our anchor): consensus $105.5, high $139, low $83; the analyst tape is a clear Hold (0 Strong Buy, 4 Buy, 18 Hold, 6 Sell). Our $103 base FV sits essentially on top of consensus — we see no edge to justify a more aggressive call. Not a value buy; a fairly-priced income holding.
7. Technicals (from the tech block)
- Trend: down. $97.26 sits above the 50-DMA ($93.88) but well below the 200-DMA ($106.81) — a stock trying to base after a decline, not one in an uptrend. The 50 below the 200 is a death-cross posture.
- Location: −26.0% off the 52-week high ($131.43), only +12.9% off the 52-week low ($86.12), and a punishing −59% max drawdown from peak — this is a broken-down chart, not a leadership name.
- Momentum: RSI(14) 47.8 — neutral, neither oversold nor overbought. MACD ~+0.5 (marginally positive, consistent with an attempted base near the 50-DMA).
- Relative strength (the tell): CLX −21.3% 12-mo vs SPY +20.6% and QQQ +30.3%; −6.7% 3-mo vs SPY +13.7%. Persistent, heavy underperformance of both the market and growth — the market has been de-rating this name, not accumulating it.
- Read: technicals do not confirm a buy. At best the stock is trying to stabilize above its rising 50-DMA; a defensive income buyer might use weakness, but there is no momentum reason to chase, and the sustained relative-strength deficit is a caution flag.
8. Moat & competitive position
Clorox's moat is brand equity + shelf-space/scale in staple categories: the Clorox trademark itself is category-defining in bleach and disinfecting; Glad, Kingsford, Brita, Burt's Bees and Hidden Valley are strong #1/#2 brands. That supports pricing power and durable ~44% gross margins. But the moat is mature and under quiet erosion: private-label/store-brand competition in bags, litter, and cleaning steadily pressures volume and mix (Q3 FY26 showed volume-led weakness in Lifestyle and unfavorable price/mix in Health & Wellness). The categories don't grow, so the fight is defensive share retention, not expansion. The GOJO/Purell add is a sensible bolt-on into professional hygiene but is EBITDA-margin-neutral and modestly EPS-dilutive near term.
Peer set (market cap): Church & Dwight $23.4B (the closest household-products comp), Brown-Forman $12.2B, McCormick $14.4B, Hormel $13.8B, J.M. Smucker $12.4B, Coca-Cola Consolidated $15.4B, BJ's Wholesale $11.4B, Performance Food Group $17.8B, Somnigroup $16.5B. Within staples, CLX is a middling grower at a middling multiple — neither the premium compounder (CHD) nor a deep-value turnaround.
9. Management, capital allocation & guidance
- Capital allocation: dividend-first. FY25 paid $602M in dividends and repurchased $332M of stock, against $761M FCF — i.e. it returns roughly all of its free cash flow, funding buybacks partly with debt (hence the negative book equity). Capex is modest (~$220M/yr, ~3% of sales). This is a mature return-of-capital model, not a reinvest-and-compound one — appropriate for the category but a cap on growth.
- Insider activity: the only recent Form 4s in the window are routine director deferred-stock-unit awards (filed 2026-07-02) at $0 cost — normal board compensation, no informative open-market buying or selling either way.
- Management's own guidance (the earnings-call track — half-weighted, they talk their own book): the SEC 8-K (Item 2.02) for Q3 FY26 (filed 2026-04-30) is a genuine earnings release and gives dated forward guidance. Management's updated FY2026 outlook:
- Net sales down ~6% (including ~3 pts positive from the GOJO acquisition, <1 pt negative from the VMS divestiture, offset by <1 pt favorable FX) — worse than the prior "low end of −6% to −10%" framing.
- Organic sales down ~9% (vs prior low end of −5% to −9%), including ~7.5 pts of drag from reversing the prior-year ERP-transition inventory build.
- Gross margin down 250–300 bps (materially worse than the prior −50 to −100 bps), citing GOJO transaction costs (~60bps), the ERP shipment reversal (~100bps), and higher energy costs tied to Middle East conflict.
- Management frames the FY26 EPS hit as ~30% to diluted EPS / ~23% to adjusted EPS vs the elevated FY25 base, driven mainly by the transitory ERP inventory drawdown (~90¢ EPS). CEO Rendle: results "mixed," "more work to do in a challenging consumer and cost environment," with confidence in "more consistent, profitable growth over time" once ERP/Purell normalize.
- Honest weighting: this is management's self-interested framing. The bull reading is that most of the FY26 weakness is transitory (ERP timing) and reverses in FY27; the bear reading is that organic declines and gross-margin erosion are real and only partly explained by timing. We give it half-weight, as designed.
10. Catalysts & what to watch
- Next earnings: 2026-07-30 (Q4 FY26; Street EPS $1.64, revenue ~$1.91B). The key lines: organic sales trajectory (is the ERP drag lapping as promised?) and gross-margin direction vs the guided −250/−300bps.
- FY2027 initial guidance (issued with Q4/FY26 results): does management guide to the growth recovery the base case assumes once ERP and Purell normalize?
- GOJO/Purell integration: accretion timing and whether it's margin-neutral as promised.
- Private-label share: volume trends in Household (bags/litter/grilling) and Lifestyle — the secular tell.
- Input/logistics/energy costs: the swing factor on gross margin.
- Dividend safety: with FY26 operating cash flow down sharply YTD, watch FCF coverage of the ~$600M dividend.
Thesis tripwires (what would change the call): organic sales failing to inflect positive in FY27; gross margin failing to recover toward 45%; a dividend-coverage scare (FCF below the payout for consecutive years); or GOJO integration proving dilutive beyond guidance. A clean ERP lap + margin recovery + share stabilization would upgrade this toward a Buy — Tactical.
11. Key risks
- Secular stagnation (structural): flat ~$7B revenue for a decade in saturated categories; the business must run hard to stay in place. This is the core reason for the Watch, not Buy.
- Private-label / trade-down: value-seeking consumers shifting to store brands pressures volume and mix — visible in the FY26 organic decline.
- Leverage + negative equity: 2.5× net-debt/EBITDA, current ratio 0.84, negative tangible book — less financial flexibility than the "safe staple" label implies.
- Margin pressure: manufacturing, logistics, and energy (Middle East conflict) costs; GOJO integration/step-up costs near term.
- Dividend coverage: ~80–90% payout with FY26 operating cash flow down 59% YTD — the yield is not risk-free if the recovery stalls.
- Execution risk: the ERP transition has already distorted two fiscal years; further disruption or a slower-than-promised lap would extend the pain.
- No expert corroboration: zero Synthos KB coverage — no independent conviction to lean on, so the entire call rests on the fundamentals and the Street.
12. Verdict, position sizing & monitoring
Watch. Clorox is a genuinely high-quality, low-beta staple franchise with a ~5% dividend — but it is ex-growth (flat revenue for a decade, guided down in FY26), carries more leverage and less balance-sheet flexibility than its defensive reputation implies (2.5× net-debt/EBITDA, negative book equity), and trades right at fair value with the stock in a real downtrend (−26% off highs, below the 200-DMA, −21% vs a +21% SPY). With ~6% upside to a $103 base FV plus the dividend, the total-return case is a hold-for-income story, not a buy-for-appreciation one — and there is no expert conviction in the Synthos KB to argue otherwise.
- Sizing: if owned at all, income sleeve only, ~1–2%, for the ~5% yield and low correlation — not a growth or flagship position. New capital has no urgency; a defensive buyer could wait for either the FY27 growth-recovery confirmation or a lower entry (toward the low-$80s bear) for a better yield-on-cost.
- Monitoring: re-underwrite on the §10 tripwires; formal re-score at the 2026-07-30 print and again on FY27 guidance. This verdict is logged as a tracked Synthos call as of 2026-07-03 at $97.26.
- Single biggest risk: secular volume stagnation and private-label share loss in no-growth categories, while a ~90% payout limits the reinvestment that could fund a real turnaround.
Provenance & disclosures
- Traceability: 0 KB claims, breadth 0 — there is no expert coverage of CLX in the Synthos knowledge base. This deep dive is explicitly fundamentals- and quant-driven; no expert conviction is claimed or fabricated (claim-ID reconciliation makes fabrication structurally impossible).
- Data as-of: fundamentals 2026-03-31 (Q3 FY26) · estimates & prices 2026-07-02/03. Forward figures are analyst consensus (FMP) or our own scenario model, labeled as estimates.
- Management caveat: the FY26 outlook in §9 is management's own book (Q3 FY26 8-K, filed 2026-04-30), half-weighted by design.
- Not investment advice. Independent research, educational and informational only, never personalized. Hypothetical/forward figures are labeled; the only performance numbers Synthos will headline are the live, real-money Flagship's.
- Version: 2026-07-03. Prior versions available via the deep-dive version dropdown ("based on the info at the time").