Oppenheimer: Waterpik, Arm & Hammer Owner Church & Dwight

Consumer staples name Church & Dwight is a retail champion, with category-leading brands as well as increasing online infiltration, an Oppenheimer expert said in a Wednesday upgrade.

The Expert

Oppenheimer analyst Rupesh Parikh upgraded shares of Church & Dwight from Perform to Exceed with a the same $54 rate target.

The Thesis

Church & Dwight has an "attractive" brand profile as well as leads vital classifications, Parikh stated in a Wednesday note.

Church & Dwight is well-positioned for a moving retail landscape, with its online penetration having actually even more than doubled from 2 percent in 2016 to 5 percent of sales in 2017, Parikh claimed.

A solid partnership with Walmart Inc and also Amazons will aid going forward and also aid in Church & Dwight's worldwide growth, the analyst said. Key experts were getting in the mid-$40s in very early November, he stated.

Shares have actually moved down 4 percent from very early January highs, tracking the S&P 500 Index-- regardless of company metrics moving higher to account for the advantages of tax obligation reform as well as "a strong, above-plan Q4," Parikh said. 

While noting that the company has actually demonstrated regular success on the M&A front, Oppenheimer does not forecast any kind of product acquisition in the near-term, but said M&A could happen later on in 2019 as the take advantage of declines closer to 1.5 times.

To make up the United States tax cut, Oppenehimer raised its quotes for Church & Dwight. That said, sentiment continues to be muted, with the sell-side tally showing six acquires versus 12 holds and 5 sells, Paikh stated.