- If you are wondering whether Clorox is fairly priced or offering value at today's levels, its recent share performance gives you a useful starting point.
- The stock last closed at US$112.15, with a 7 day return of a 4.5% decline, a 30 day return of a 6.2% decline, and a year to date gain of 11.2%, against a 1 year return of a 20.8% decline and a 5 year return of a 30.3% decline.
- Recent coverage around Clorox has focused on its role as a well known consumer staples name and how it fits into portfolios that prioritise household brands. This context helps explain why investors continue to watch the stock closely even after periods of weaker long term returns.
- Simply Wall St currently assigns Clorox a valuation score of 4 out of 6. Next we will look at how different valuation approaches arrive at that view, before finishing with an even more rounded way to think about the company's value.
Find out why Clorox's -20.8% return over the last year is lagging behind its peers.
Approach 1: Clorox Discounted Cash Flow (DCF) Analysis
A Discounted Cash Flow, or DCF, model estimates what a business could be worth today by projecting its future cash flows and then discounting those back into a single present value figure.
For Clorox, Simply Wall St uses a 2 Stage Free Cash Flow to Equity model. The company’s last twelve month free cash flow is about $777.1 million. Analyst and extrapolated projections suggest free cash flow of $664.2 million in 2026 and $1,137 million in 2030, with later years extended using modest growth assumptions. All of these cash flows are in US$ and are discounted back to today to reflect the risk and time value of money.
Putting those projections together, the model arrives at an estimated intrinsic value of roughly $227.85 per share. Compared with the recent share price of $112.15, the DCF implies a discount of about 50.8%, which indicates the stock screens as materially undervalued on this approach.
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Clorox is undervalued by 50.8%. Track this in your watchlist or portfolio, or discover 50 more high quality undervalued stocks.
Approach 2: Clorox Price vs Earnings
For a profitable company like Clorox, the P/E ratio is a useful shorthand for what the market is paying today for each dollar of earnings. A higher or lower P/E often reflects what investors expect for future growth and how much risk they see in those earnings.
Clorox currently trades on a P/E of 18x. That sits above the Household Products industry average of about 17x, but below the peer group average of 25.49x, so the market is valuing it at a premium to the broader industry and at a discount to closer peers. These simple comparisons are helpful, but they do not adjust for company specific factors like growth, margins, size, or risk.
Simply Wall St’s Fair Ratio tries to fill that gap. It is a proprietary estimate of what Clorox’s P/E might be given its earnings growth profile, industry, profit margins, market cap and risk characteristics. For Clorox, the Fair Ratio is 18.71x, slightly higher than the current 18x. That gap is relatively small, which suggests the shares are trading close to the level implied by these fundamentals.
Result: ABOUT RIGHT
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Upgrade Your Decision Making: Choose your Clorox Narrative
Earlier we mentioned that there is an even better way to understand valuation. Let us introduce you to Narratives, a feature on Simply Wall St’s Community page that lets you attach a clear story about Clorox to your own forecast for revenue, earnings, margins and fair value. You can then compare that fair value to the current share price and see in one place how a more cautious view that points to fair value around US$94 and a more optimistic view closer to US$155 can coexist. Narratives update automatically as new news or earnings are released and can help you decide for yourself whether the price looks high, low, or roughly in line with the story you believe.
For Clorox, however, we will make it really easy for you with previews of two leading Clorox Narratives:
Think of these as two clear stories you can stress test against your own view of the business, rather than a single answer on what the stock should be worth.
Fair value: US$119.76
Discount to fair value vs last close: 6.4%
Revenue growth assumption: 135.20%
- Analysts expect ERP and broader digital projects to improve supply chain efficiency, support margins, and help earnings over time once implementation effects settle down.
- The narrative leans on product refreshes in health, wellness, and cleaning, plus digital marketing and e commerce, as tools to support brand strength and organic revenue.
- Risks focus on slow category growth, heavier price competition, cost inflation, and consumer trading down, all of which could pressure Clorox's pricing power and margins if they persist.
Fair value: US$94.00
Premium to fair value vs last close: 19.3%
Revenue growth assumption: 86.88%
- This narrative highlights slower product refresh cycles and a heavier tilt to traditional formulas, which could leave Clorox exposed if consumers continue to favour private labels and alternative cleaning products.
- It places weight on tighter regulations, higher environmental compliance costs, and ongoing supply chain and tariff pressures that could limit margin recovery.
- Even though Clorox is investing in digital tools, productivity, and margin work, the bearish view is that these may not fully offset headwinds, so current pricing is seen as demanding relative to those assumptions.
If you want to see how other investors are framing these stories in detail, you can move from these quick previews into the full community narratives for Clorox and compare them with your own assumptions before making any decision.
Do you think there's more to the story for Clorox? Head over to our Community to see what others are saying!
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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