CHD

Analysis of Church & Dwight Co., Inc. (CHD)

Technical Analysis CHD shows signs of stabilization with a 5.27% rebound over the past month, though it remains 24.5% below its 52-week high. Its low beta of 0.46 confirms defensive characteristics, but the significant maximum drawdown of -27.92% highlights vulnerability during market downturns. The stock's position near the lower end of its annual range suggests potential oversold conditions.

Fundamental Analysis CHD exhibits solid revenue growth and maintains strong profitability with an 11.5% net profit margin. The company's financial health is sound with manageable debt levels and adequate liquidity, though operational efficiency metrics like ROE (4.3%) indicate room for improvement. Effective working capital management supports stable cash flow generation.

Valuation Assessment Valuation presents mixed signals: while the forward P/E of 29.35 reflects high growth expectations, the negative PEG ratio (-7.63) and elevated EV/EBITDA (66.94) raise concerns about earnings sustainability. The P/B ratio of 4.93 suggests the market values CHD's strong brand portfolio, but current multiples demand careful scrutiny given modest growth projections.

Risk Evaluation CHD's low beta provides downside protection during market volatility, though the substantial maximum drawdown indicates meaningful downside risk remains. The absence of significant short interest reduces near-term speculative pressure, but investors should monitor potential liquidity constraints given the stock's defensive nature.

Investment Recommendation

CHD presents a compelling case for conservative investors seeking stability in consumer staples. The company's strong brand portfolio, consistent revenue growth, and defensive characteristics provide a buffer against market volatility. While current valuation multiples appear stretched, the stock's oversold technical position and sound fundamentals support a strategic accumulation approach. Investors with a long-term horizon may find CHD attractive for its resilient business model and potential for gradual recovery.

RockFlow Model Forecast: Three Scenarios for 2026

Of course. Here is a 12-month outlook for Church & Dwight Co., Inc. (CHD).

12-Month Outlook for CHD:

Over the next 12 months, CHD's outlook is stable with a bias toward gradual recovery. Key catalysts will be the defensive nature of its essential consumer brands, which typically hold up well during economic uncertainty, and its solid fundamentals supporting continued execution. The primary risk is its elevated valuation; the stock remains susceptible to further multiple compression if its modest earnings growth fails to justify the high forward P/E ratio. Given the current technical oversold position and the absence of a specific analyst target, a reasonable target range appears to be $95 - $105, contingent on a broader market rally and sustained consumer spending.

Wall Street Consensus

Most Wall Street analysts are optimistic about CHD's 12-month outlook, with consensus target around $90.16, indicating expected upside potential.

Overall, CHD has investment potential but also faces challenges. Here are key factors to weigh before investing.

CHD has demonstrated mixed performance with recent stabilization but remains significantly below its 52-week high. The stock shows moderate recent gains while continuing to underperform the broader market on a relative basis.

Short-term performance reveals a notable 5.27% rebound over the past month, though the three-month change remains relatively flat at 0.4%. Despite this recent strength, CHD has underperformed the market by 2.97% over the three-month period, indicating relative weakness despite positive absolute returns.

Currently trading at $87.97, CHD sits just 8.2% above its 52-week low and remains 24.5% below its peak, positioning it in oversold territory within its annual range. The stock's low beta of 0.46 confirms its defensive characteristics, though the maximum drawdown of -27.92% highlights the significant downside experienced during the past year.

Revenue & Profitability CHD demonstrated solid revenue growth in Q3 2025, increasing from $1.51 billion to $1.59 billion quarter-over-quarter. The company maintained strong profitability with a net profit margin of 11.5%, though this was a slight decrease from the prior quarter's 12.7%, primarily due to higher operating expenses.

Financial Health The company's debt management appears sound, with a manageable debt-to-equity ratio of 56% and an interest coverage ratio of 5.44x. CHD maintains adequate liquidity with a current ratio of 1.09, though the quick ratio of 0.66 suggests some reliance on inventory to meet short-term obligations.

Operational Efficiency Operational efficiency shows room for improvement, with a modest return on equity of 4.3% and an asset turnover ratio of 0.17. The cash conversion cycle of 21 days indicates effective working capital management, while the fixed asset turnover of 1.69 suggests reasonable utilization of long-term assets.

Stock Valuation Analysis

Based on the provided metrics, CHD appears overvalued relative to historical earnings power but reasonably valued on a forward-looking basis. The trailing P/E of 26.59 is elevated, suggesting a premium valuation for past earnings, while the forward P/E of 29.35 indicates continued high expectations. The significantly negative PEG ratio (-7.63) is a major concern, signaling that earnings growth is negative and failing to justify the high earnings multiple, which is further corroborated by an exceptionally high EV/EBITDA of 66.94, pointing to expensive cash flow generation.

A peer comparison against industry averages is not possible with the provided data. However, the price-to-sales (P/S) ratio of 3.39 and price-to-book (P/B) ratio of 4.93 must be assessed independently. A P/B near 5 implies the market values the company's assets at a substantial premium to their accounting value, which is typically justified only by strong brand intangible assets or exceptional profitability. The P/S ratio suggests investors are paying a significant multiple for each dollar of revenue, which must be weighed against the company's net profit margin to determine if it is appropriate.

Volatility Risk

CHD's beta of 0.46 indicates significantly lower volatility than the broader market, suggesting the stock is relatively stable and less reactive to market swings. However, the 1-year maximum drawdown of -27.92% reveals that the stock still experienced substantial peak-to-trough declines during market stress, implying investors should be prepared for potential losses despite its low beta.

Other Risks

With no reported short interest, there is little speculative betting against the stock, reducing near-term pressure from forced covering rallies. However, the absence of short interest data could also indicate lower liquidity or analyst coverage, potentially leading to larger spreads or slower price discovery during market events.