Investment firm Wells Fargo has raised its price target for Clorox (NYSE: CLX) to $115, up from its prior target of $108, while maintaining an Equal Weight rating on the stock. Current market data indicates Clorox's shares are trading near $112.20, with a price-to-earnings ratio of 17.57. Based on Wells Fargo's Fair Value metrics, the stock is currently considered slightly undervalued.
This upward revision in price expectation follows Clorox’s recent announcement of its plan to acquire GOJO Industries, the manufacturer known for Purell hand sanitizer. The transaction is structured as an all-cash deal valued at $2.25 billion. After accounting for anticipated tax benefits amounting to $330 million, the net purchase price effectively stands at $1.92 billion.
According to Wells Fargo's assessment, this acquisition pertains to a business segment generating a low double-digit percentage of total sales, with an expected mid-single-digit growth rate. The firm anticipates that the purchase will contribute roughly 0.5 percentage points to Clorox’s overall growth trajectory. From a strategic perspective, the acquisition is characterized as an assertive initiative by Clorox to optimize its portfolio via leverage of its balance sheet. Data from InvestingPro suggests Clorox currently maintains moderate debt levels and holds a GOOD financial health rating.
The negotiated net purchase price equates to an adjusted EBITDA multiple of 11.9 times. When factoring in anticipated run-rate cost synergies estimated at $50 million, the effective multiple reduces to 9.1 times EBITDA. To finance the acquisition, Clorox plans to utilize debt, which is projected to elevate its net leverage ratio to about 3.6 times upon deal closure.
Management at Clorox projects the acquisition will have a neutral impact on earnings per share during the first fiscal year following close, transitioning to an accretive effect in the subsequent year. The transaction completion is targeted by the conclusion of Clorox’s fiscal year 2026.
It is noteworthy that Clorox has a long-standing history of dividend payments, sustaining distributions for 56 consecutive years, and currently offers a dividend yield of approximately 4.42%. The company’s next earnings report is scheduled for February 3, 2026.
In related developments, Clorox recently posted fiscal first-quarter earnings results for 2026 that surpassed analyst expectations, recording earnings per share of $0.85 compared to the projected $0.82. Revenue figures also outperformed forecasts, with reported sales of $1.43 billion surpassing the expected $1.39 billion. Following these results, broker Jefferies updated its price target for Clorox to $152 from $155, retaining a Buy rating.
Furthermore, Clorox committed 300,000 volunteer hours to the Realize the Dream initiative, a program honoring Dr. Martin Luther King Jr.’s legacy. Analyst Nik Modi of RBC Capital listed Clorox among top consumer goods investment opportunities, though he acknowledged looming headwinds in the sector.
Collectively, these actions underscore Clorox's proactive approach in portfolio enhancement, strategic acquisition, and community engagement amid a complex economic environment.