Shares of Church & Dwight Co., Inc. CHD have been on a strong upward trajectory, hovering near its 52-week high of $113.50, achieved on Nov. 22. This surge in stock price is a reflection of the company's exceptional performance, fueled by strong consumer demand across CHD's portfolio, the resilience of its brands, successful new product launches and continued commitment to effective execution.
With the stock closing at $109.89 yesterday, it remains just 3% below that peak. CHD has seen a 16.2% rise in the year-to-date period, outpacing the industry's growth of 12.9% during the same period. This success is attributed to strong brand equity, enhanced profitability and ongoing innovation. These efforts have allowed Church & Dwight to outperform the broader sector, which grew by 4.7% over the same time frame.
CHD Stock Year-to-Date Performance
Image Source: Zacks Investment Research
Technical indicators are also supportive of Church & Dwight’s strong performance. The stock is trading above its 50-day and 200-day moving averages, indicating robust upward momentum and price stability. This moving average is an important indicator for gauging market trends and momentum.
CHD Trading Above 50 and 200-Day Moving Averages
Image Source: Zacks Investment Research
Evaluating CHD Stock's Surge to a 52-Week High
CHD surged near the highest level following its impressive third-quarter fiscal 2024 results, coupled with an upgraded full-year outlook. The company recorded a third-quarter sales increase of 3.8% year over year. The upside can be attributed to robust consumer demand across its portfolio.
Church & Dwight’s strong brand equity provides the company with pricing power, allowing it to pass on cost increases to consumers with minimal impact on demand, thus supporting profitability. Volume and price increases remained an upside to the company’s organic sales in the third quarter of 2024.
The company’s online sales are also a key growth driver, representing 20.7% of global sales as of the third quarter. Church & Dwight’s ongoing investment in its direct-to-consumer platforms and omnichannel strategies positions it well to capture the continued shift toward e-commerce. With these initiatives, the company is poised to benefit from consumer purchasing trends, ensuring strong sales performance in the future.
Church & Dwight benefits from a strong portfolio of trusted brands like Arm & Hammer, OxiClean, Hero, Batiste and TheraBreath, which drive solid revenues across essential household and personal care segments. Recent innovative launches, such as ARM & HAMMER Deep Clean, Power Sheets, BATISTE Sweat Activated, BATISTE Touch Activated and TheraBreath Deep Clean Oral Rinse, are generating strong consumer interest. These innovations, along with strategic acquisitions, help diversify the company’s product offerings and position it for sustained growth, further enhancing its earnings potential.
Estimates for CHD Stock: What’s on the Horizon?
Reflecting the positive sentiment around Church & Dwight, the Zacks Consensus Estimate for earnings per share has seen upward revisions. Over the past 60 days, analysts have increased their estimates for the current and next fiscal year by 0.6% to $3.45 and by 0.8% to $3.75 per share, respectively. These estimates indicate expected year-over-year growth rates of around 8.8% and 8.7%, respectively.
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Challenges Ahead for CHD Stock
Despite all the positives, Church & Dwight is facing challenges related to consumer spending in the current environment. Recent trends indicate a slowdown in consumer consumption, particularly in July, where dollar consumption growth decelerated from 4.5% to approximately 2.5% in the third quarter.
This deceleration is attributed to consumers adjusting their spending habits in response to extended economic pressures, hurricanes and the port strike. While there was a slight improvement in the U.S. consumption within the company’s categories in September and October, it remains cautious about the U.S. consumer and category growth rates for the fourth quarter.
Church & Dwight’s gummy vitamins business continues to be a drag on overall growth, with a notable decline of 10% in consumption in the third quarter compared to the previous year. Although there are efforts to stabilize the segment through new packaging, upgraded formulas and higher marketing investments, the recovery has been slower than anticipated, impacting overall performance in the personal care category.
Final Thoughts on CHD Stock
Investors may find Church & Dwight’s stock appealing due to its strong third-quarter performance, driven by robust brand equity, improved profitability and ongoing innovation. However, challenges related to consumer spending in the current economic environment warrant close monitoring of the company’s progress. While potential investors could wait for a better time to enter, for existing investors, holding onto CHD stock appears prudent. Church & Dwight currently carries a Zacks Rank #3 (Hold).
Three Stocks to Consider
We have highlighted three better-ranked stocks from the Consumer Staples sector, namely Ingredion Incorporated INGR, Freshpet FRPT and Pilgrim’s Pride PPC.
Ingredion Incorporated manufactures and sells sweeteners, starches, nutrition ingredients and biomaterial solutions derived from wet milling and processing corn and other starch-based materials. The company currently sports a Zacks Rank #1(Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
INGR has a trailing four-quarter earnings surprise of 9.5%, on average. The Zacks Consensus Estimate for Ingredion’s current financial-year’s earnings indicates growth of 12.5% from the year-ago reported number.
Freshpet, a pet food company, presently sports a Zacks Rank #1. FRPT has a trailing four-quarter earnings surprise of 144.5%, on average.
The Zacks Consensus Estimate for Freshpet’s current financial-year sales and earnings suggests growth of 27.3% and 228.6%, respectively, from the year-ago period’s reported figure.
Pilgrim’s Pride, which produces, processes, markets and distributes fresh, frozen and value-added chicken and pork products, currently carries a Zacks Rank of 2 (Buy). PPC delivered a positive earnings surprise of 30.9% in the trailing four quarters, on average.
The Zacks Consensus Estimated figure for Pilgrim’s Pride’s current financial-year earnings indicates growth of 202.9% from the prior-year reported level.
5 Stocks Set to Double
Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>Church & Dwight Co., Inc. (CHD) : Free Stock Analysis Report
Freshpet, Inc. (FRPT) : Free Stock Analysis Report
Pilgrim's Pride Corporation (PPC) : Free Stock Analysis Report
Ingredion Incorporated (INGR) : Free Stock Analysis Report
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