Goldman visits Household Products; upgrades Kimberly-Clark, cuts Estee Lauder

Investing.com - Goldman Sachs has turned its eye onto the U.S. Household Products sector, and has upgraded its stance on Kimberly-Clark (NYSE:KMB) and Church&Dwight (NYSE:CHD), while downgrading Estee Lauder (NYSE:EL) and Kenvue (NYSE:KVUE).

Analysts at the investment bank lifted its stance on Church&Dwight to ‘buy’ from ‘neutral’, saying “we expect CHD’s distribution expansion opportunity (especially internationally) to sustain its top-tier organic growth momentum within our HPC coverage group, while near-term market share challenges in its domestic business are likely to prove transitory.2

Goldman also upgraded Kimberly-Clark to ‘buy’ from ‘neutral’, saying “we expect a combination of inflection in volume trends along with a much more accommodative input cost backdrop to drive above-consensus gross margin expansion.” 

On the flip side, the bank downgraded both Estee Lauder and Kenvue to ‘neutral’ from ‘buy’, “as we see more limited upside near term.”

Goldman keeps a ‘buy’ rating on Colgate-Palmolive Company (NYSE:CL), “where we see continued reinvestments driving its strong fundamental outlook”, and a ‘sell’ rating on Clorox (NYSE:CLX).

Clorox has made significant progress on distribution recovery, the bank said, but “there are still pockets (e.g., trash bags) where recovery in distribution and service levels is taking longer, and amidst a period where peers are heavily investing in brand activation, marketing, and innovation in an effort to capture share.”