Clorox Co. slumped to the lowest in more than a year after the maker of bleach and other cleaning products detailed the financial impact from an August cyberattack, prompting at least one downgrade and several price-target cuts on Wall Street.
The shares fell as much as 7.3% in early trading Thursday to about $122, the lowest since June 2022. The tumble extended the stock’s drop to more than 20% since the company first reported the incident on Aug. 14.
After the market closed Wednesday, Clorox said the attack — which halted production at some US factories and prompted product shortages — put significant pressure on sales and profit in the quarter ended Sept. 30. The company also said it expects ongoing, though moderating, operational impacts in the current quarter.
At Raymond James Financial Inc., analyst Olivia Tong downgraded her recommendation on Clorox to market perform from outperform following the update, citing less visibility around sales and other areas in the near term.
“We expect that the company will need time to ramp and rebuild the pipeline, which could result in continued loss of sales at retail and eventually, a need to increase promotion to regain lost market share,” Tong wrote in a note to clients Thursday.
Bernstein, Deutsche Bank AG and Wells Fargo & Co. were among firms lowering their 12-month price targets for the shares. Barclays Plc analyst Lauren Lieberman cut hers to a Street-low $116 from $127, implying a 12% drop from Wednesday’s close.
Clorox, which reports earnings for last quarter in November, said Wednesday that organic sales for the period may show a drop of as much as 26%. Before the attack, it had been expecting “mid-single-digits” growth. Meanwhile, it now expects quarterly gross margin to decline year-over-year, versus a previous forecast that it would rise.
“While getting more specific details on the impact is a positive, there are still potentially negatives ahead,” Wells Fargo analyst Chris Carey said.
He noted weakening consumption trends, potential difficulty recouping shelf space lost due to shortages, and a likely move by the company to reduce its earnings forecast. He reiterated an underweight rating on the shares and lowered his price target to $135 from $140.
Clorox has three buys, 11 holds and seven sell ratings among analysts tracked by Bloomberg, and an average price target that indicates return potential of about 17% over the next 12 months.
