Earnings Beat Can't Prop Up Clorox Stock

The company warned against some upcoming overlap with tough comparables

Deputy Editor
Feb 4, 2021 at 9:44 AM
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The shares of Clorox Co (NYSE:CLX) are taking a step back this morning, off 2.8% at $198.85, even after the household goods company posted fiscal second-quarter earnings and revenue that topped analyst estimates. Clorox also lifted its full-year profit and sales forecast, which exceeded expectations as well, though it did project flat back-half sales as it begins to catch up with some tough comparables. 

The security has taken a fairly steep nosedive during the past week, dropping over 8% over the last five days after a mid-January surge just below the $323 region. Today's drop puts CLX even further back below familiar rejection level at its 40-day moving average, though year-over-year, the equity is still clinging to a roughly 20% gain. 

Analysts remain hesitant. Of the 11 in coverage, seven call it a "hold" or worse. Meanwhile, the 12-month consensus price target of $219.29 is a 7.2% premium to last night's close. 

Option traders have been a bit more bearish than usual, too. While calls are still outnumbering puts on an overall basis, the security's 50-day put/call volume ratio of 0.83 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) stands in the slightly elevated 70th percentile of its annual range, hinting at an uptick in put buying of late. 

Short sellers have also been building their positions. During the last two-week reporting periods, short interest climbed 3.7%, and now makes up 10.1% of CLX's available float. This amounts to exactly eight days of pent-up buying power, at the security's average daily pace of trading. 

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