The Clorox Company (CLX) $96.56
Clorox is trading at a deep discount with a massive 5.14% dividend yield, but the technical floor is still being stress-tested by institutional sellers.
52-wk High $132.03
📌 Investment Snapshot
- Trading at 15.7x P/E, a significant discount to the household products industry average.
- Latest Q3 revenue of $1.67B met expectations while EPS of $1.54 showed margin resilience.
- A 5.14% dividend yield provides a significant cushion for long-term income seekers.
- Consensus target of $104.94 implies modest 8.7% upside from current levels.
Clorox is attempting to stabilize after a 27% drawdown from its 52-week high. While the high Technical Confluence Score of 90/100 signals a tactical bounce, the lack of RSI oversold conditions prevents a ‘BUY’ rating.
| 📍 Entry Zone | $93.50 or below | 🛑 Stop-Loss | $89.00 |
| 📋 Adjust If | RSI drops below 35 or the 10Y Treasury yield spikes above 4.8%. | ||
The Investment Case — Why Now?
Over the last 90 days, Clorox shifted from a growth-recovery story to a pure value play as shares retreated 7.1%. The market is currently weighing the benefit of lower input costs against the headwind of a $-0.2B quarterly free cash flow print. Institutional interest remains concentrated in passive giants like Blackrock and Vanguard, suggesting a lack of aggressive active accumulation.
The primary risk remains the 10.8% short interest, which reflects skepticism regarding the company’s ability to maintain its 5.14% dividend yield if cash flow doesn’t pivot. With the 10Y Treasury at 4.55%, the ‘yield gap’ for CLX has narrowed, making the stock less attractive to income-oriented rotation. We need to see a sustained move back toward positive free cash flow to justify a more aggressive stance.
🤔 Does a 5.1% yield compensate you for the risk of a $-0.2B free cash flow deficit in a high-rate environment?
🏢 Company Overview
| Detail | Value |
|---|---|
| Sector | Consumer Defensive |
| Industry | Household & Personal Products |
| Dividend Yield | 5.14% |
| Short Interest | 10.8% |
📈 Price Action & Technicals
Inside VA
Buy-side Sweep at $93.19 on 2026-07-09
The price action is currently sandwiched between the SMA50 at $93.71 and the SMA200 at $104.48, signaling a medium-term consolidation phase. While today’s 3.38% jump is encouraging, the stock remains significantly below its 200-day moving average, which confirms a dominant bearish trend.
RSI at 51.6 reveals a total lack of conviction from either side, as it sits squarely in the ‘no man’s land’ of momentum. The MACD is currently trailing its signal line at 0.25, which underscores the recent weakness despite the daily bounce.
Anchored VWAP from the May lows sits at $93.53, acting as the primary line of defense for bulls in the current structure. The Volume Profile Point of Control (POC) at $97.48 represents a heavy supply zone that will likely stall any immediate rallies.
Recent liquidity sweeps show a tug-of-war, with a buy-side sweep at $93.19 providing the fuel for the current move higher. However, the bearish FVG between $94.07 and $97.0 was just filled, often a precursor to a secondary retest of the lows.
Historically, when CLX trades at this distance from its 52-week high with an ADX of 21, it tends to range-trade for several weeks before a definitive breakout. We expect the $93.00 to $98.00 range to hold until the next catalyst.
⚖ Peer P/E Comparison
| Ticker | Company | P/E (TTM) |
|---|---|---|
| CLX | The Clorox Company | 15.7x |
| PG | Procter & Gamble | 24.2x |
| CHD | Church & Dwight | 28.5x |
| KMB | Kimberly-Clark | 18.1x |
| SPY | S&P 500 Avg | 21.4x |
💰 Earnings Deep Dive
| Period | Revenue | EPS | YoY |
|---|---|---|---|
| Q3 2026 | $1.67B | $1.54 | -1.2% |
| Q2 2025 | $1.67B | $1.29 | +2.1% |
| Q1 2025 | $1.43B | $0.65 | -15.4% |
| Q4 2025 | $1.99B | $2.68 | +4.5% |
Free Cash Flow for the latest quarter was $-0.2B, a concerning figure for a dividend-heavy stock.
Revenue has remained stagnant at $1.67B for two consecutive quarters, indicating a struggle to find new volume growth. While EPS improved sequentially to $1.54, the negative cash flow suggests that internal reinvestment or debt servicing is eating into the capital available for shareholders.
🚀 Growth Drivers — What Moves the Stock
- Margin Recovery 🟢 Upside Surprise — Lowering manufacturing costs and supply chain optimization are driving EPS beats despite flat sales.
- Price Elasticity 🟡 Priced In — Further price hikes may lead to consumer trade-down to generic brands in a tightening economy.
- Professional Segment 🟡 Priced In — Growth in cleaning services for healthcare and hospitality remains a steady, albeit slow, revenue stream.
🏦 Smart Money & Institutional Positioning
13F Holdings
| Institution | Shares (K) |
|---|---|
| Blackrock Inc. | 10,171 |
| State Street Corporation | 8,254 |
| Vanguard Capital Management | 7,850 |
Holdings reflect most recent 13F (45-day lag).
Insider Transactions
| Name | Title | Date | Type | Shares |
|---|---|---|---|---|
| HYDER CHRIS T | COO | 2026-06-17 | Purchase | 42,118 |
| BELLET LUC | CFO | 2026-06-17 | Purchase | 42,118 |
Short Interest
| Short % Float | Days to Cover |
|---|---|
| 10.8% | 4.4 |
⚠ Key Risk Factors
~$0.5B market cap
~$1.2B impact
~$200M revenue
🤔 Will the recent insider buying by the CFO and COO be enough to convince the 10.8% of shorts to cover?
🎯 Guidance & Wall Street View
Management has focused on ‘IGNITE’ strategy goals, targeting 3-5% long-term sales growth and margin expansion.
| High Target | Mean Target | Low Target | Analysts | Consensus |
|---|---|---|---|---|
| $163.00 | $104.94 | $77.00 | 17 | Hold |
| Firm | Rating | Target | Date | Action |
|---|---|---|---|---|
| Wells Fargo | Equal-Weight | $105 | 2026-05-18 | Maintained |
| Barclays | Underweight | $90 | 2026-05-04 | Maintained |
The analyst community is largely skeptical, with a ‘Hold’ consensus and several ‘Underweight’ ratings from major firms like JP Morgan and Barclays.
📊 Bull vs Bear — Probability-Weighted Scenarios
🐂 Bull Case
- Margin expansion exceeds expectations as commodity costs fall.
- Short squeeze triggers if price reclaims the SMA200 at $104.
📊 Base Case
Clorox continues to range-trade as it works through negative cash flow issues while maintaining its dividend.
🐻 Bear Case
- Dividend cut fears emerge if FCF does not turn positive by year-end.
- Consumer trade-down accelerates, leading to revenue misses.
🎯 Investor Action Plan — By Profile
The 90/100 Technical Confluence Score suggests a bounce is likely, but wait for a clear break above $98.34 (recent sweep high) to confirm momentum before entering.
The 5.1% yield is tempting, but the RSI at 51.6 is not yet at the ‘deep value’ levels (RSI < 35) that historically provide the best margin of safety.
Maintain existing positions for the dividend, but refrain from adding new capital until the company demonstrates a return to positive free cash flow.
❓ Investor FAQ — People Also Ask
Q: Is the Clorox dividend safe?
With a 5.14% yield and negative free cash flow last quarter, the dividend is under more pressure than usual, though management remains committed to its Dividend Aristocrat status.
Q: Why is the stock down 27% from its high?
A combination of stagnant revenue growth, rising interest rates making yields less attractive, and concerns over consumer spending power has weighed on the valuation.
Q: What is the key technical level to watch?
The $93.53 Anchored VWAP is the ‘must-hold’ support level; a break below this would likely lead to a retest of the 52-week low at $84.70.
📖 New to these terms? P/E Ratio · Free Cash Flow · Insider Signals · Stop-Loss · RSI
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📋 Disclaimer
This analysis is for informational purposes only and does not constitute financial advice. The author has no position in CLX at the time of writing.
All active positions and their real-time performance are tracked on our Investment Log.
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