CLX is a buy for long-term investors; fair value $110 vs price $81 implies >34% upside in 12-18 months, supported by 13x forward P/E and >6% dividend yield despite margin decline.

Consumer staples companies like Clorox are facing similar headwinds. To do this, one of the methods they use is to switch from branded products such as Clorox and Procter & Gamble to store-branded products .

Such as the brands " Kroger", " Amazon Basics", and others that you see sold alongside popular products like "Clorox" and "Procter & Gamble".

On the other hand, Clorox, like other consumer goods companies, is facing higher input costs due to inflation, the war in Ukraine, and tariffs. Therefore, they are facing a double blow that negatively impacts their business significantly.

Therefore, it is not surprising to me to see Clorox stock down this year and over the past twelve months. But is this a good time to buy Clorox stock amid these short-term headwinds ?

In addition to these recent developments, Clorox continues to deal with the unprecedented circumstances of the pandemic . Remember that its business really boomed during the pandemic, with sales jumping to 7.5 billion.

But I will say that Clorox was not one of the companies that handled the pandemic brilliantly. There were some companies that did not handle the pandemic well, made some mistakes, or were unable to deal with increased demand effectively.

Clorox was one of them . You didn't make any serious mistakes, did you?

Clorox wasn't that bad, but it simply didn't handle the increased demand as effectively. It was either unable, or its supply chains were not prepared to handle that increase in supply.

They did not have sufficient flexibility in their supply chain to meet the growing demand cost-effectively.

Following that, the results were not effective policies either, because in order to cope with those short- term increases in demand, they entered into some contracts to buy surplus supplies.

And so they were and still are dealing with those effects after the economy reopened.

Now, they are dealing with a much more significant overall headwind, such as the one I mentioned in the introduction to the video. So, Clorox has gone through a few years of difficult circumstances.

As a result , I saw their profit margins almost collapse, didn't I? At the height of the pandemic, Clorox achieved an operating profit margin of 23%. This margin has now dropped to 9%.

So, there is a significant decline in their operating profit margin, and this is likely to continue over the next twelve months. Perhaps after that, the business will adapt , and the company can improve efficiency.

The inflation rate may moderate. I do n't think price levels will decrease, but at least they won't increase as rapidly as they have in recent years.

The company’s returns on invested capital are also declining, but they remain above the weighted average cost of capital, which is a good sign for investors to be assured that even under four to five years of extremely difficult macroeconomic conditions, the company is still achieving operating profit margins of around 10% and continues to generate returns on invested capital that exceed the company’s weighted average cost of capital.

When you think about investing in a company for the long term , you want to see how that company handles difficult circumstances. You can feel more at ease when you see the management team handling difficult circumstances effectively.

Now, I can't say that Clorox did an excellent job in dealing with these difficult circumstances, but it did a reasonable job . They did not stumble. They did not make serious mistakes with long-term negative side effects .

Of course, if you're looking at Clorox stock, you're probably attracted to the dividends, which have been more than 6% over the past twelve months. Therefore, even if the share price remains stable over the next twelve months, you will still receive a good dividend yield exceeding 6%.

But I actually think the share price may accelerate over many years, and I think the dividend per share has room to increase further. The appeal is not limited to dividend payouts; the valuation is also attractive.

When measured on a forward price-to-earnings basis , Clorox stock has never been cheaper at 13.

Furthermore, today I updated my discounted cash flow valuation for Clorox. The reviews were trending downwards. The company's performance is not as strong as I expected 3 or 6 months ago.

Working conditions deteriorated without any specific fault on the part of the company itself. The overall economic conditions continued to deteriorate throughout 2025 and 2026.

Therefore, I lowered the company's expectations and raised my estimates of the associated risks.

Even after these estimates, I calculate the fair value of the stock to be 110 compared to its current market price of 81. I still see potential for gains exceeding 34 % over the next 12 to 18 months for Clorox.

In answer to the question I posed in the title, yes, I see it as a buying opportunity for long-term investors, dividend- paying stock investors , passive income seekers, and all investors in general.

I am impressed with the risk-to- reward ratio here,