J.P. Morgan Downgrading Clorox To Neutral

According to J.P. Morgan, Clorox CLX is downgraded to Neutral. J.P. Morgan reported that it is downgrading CLX to Neutral from Overweight primarily on valuation as it is trading at a mid-single-digit premium to companies such as CL and PG, while historically it has traded at a mid- to high-single-digit discount. “The stock has hit our Dec 2011 PT of $70 and has outperformed its LC peers YTD (with the exception of EL), in large part due to Carl Icahn's disclosure of a roughly 9% stake in the company. While we continue to expect CLX's earnings and sales to accelerate in 2HFY11 and view that favorably, we cannot justify an Overweight rating on the stock relative to the remainder of our coverage universe as we view its multiple of roughly 16.5 our NTM estimates as too rich.” Clorox closed yesterday at $70.17.