Rothschild Redburn moved Church & Dwight Co. Inc. (NYSE: CHD) off its Sell list on Friday, raising the brokerage's rating to Neutral and lifting its 12-month price objective to $91 from $81. The firm said it has shifted to a less cautious stance after revisiting factors that previously weighed on its view of the consumer goods company.
In explaining the change, Rothschild Redburn reiterated elements of its earlier critique: the firm had been concerned that slowing growth would not be consistent with Church & Dwight's premium price-to-earnings multiple. It also pointed to the substantial price increases the company implemented earlier in the decade, which had influenced the prior Sell recommendation.
The analyst note reiterated a nuanced view of Church & Dwight's Power Brands portfolio. Rothschild Redburn said management had emphasized the success of four of eight Power Brands - Arm & Hammer, Thera Breath, Hero, and Touchland - but at the same time had not fully acknowledged share losses and revenue declines in the other four Power Brands: Batiste, Oxiclean, Waterpik, and Vitafusion. The firm had earlier flagged soft underlying trends in roughly 30% of the company's sales, a concern that contributed to its previous negative stance.
Despite those prior reservations, Rothschild Redburn said it has become "more constructive" on Church & Dwight's outlook, prompting the upgrade and higher target.
Church & Dwight reported fourth-quarter results that included earnings per share of $0.86, topping the consensus estimate of $0.84. Revenue for the quarter came in at $1.64 billion, in line with expectations.
Market reactions from other brokerages were broadly supportive of the quarter. UBS raised its price target on the company to $102, citing strong gross and operating profit margins as justification for the increase. TD Cowen also lifted its target to $99, keeping a Hold rating while noting that organic growth excluding vitamins was 1.8%, which met analyst expectations.
JPMorgan likewise moved its rating higher, upgrading Church & Dwight from Underweight to Neutral and setting a $100 price target. JPMorgan said recent portfolio adjustments - including divestitures and acquisitions - position the company for faster growth, although the firm added that Church & Dwight has not yet reached its long-term growth targets.
Taken together, the brokerage actions signal a mixed but generally more positive stance among analysts toward Church & Dwight's recent performance and strategic moves. While some legacy concerns about brand-level weakness and portions of sales remain, several firms have raised targets or eased ratings following the company's reported quarter and apparent margin resilience.