The Clorox Company (CLX) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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The Clorox Company (CLX)

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Intrinsic Value (DCF)

Current$108.86
Intrinsic$89.35
-18%
$54.25$89.35$156.09
Market implies 12% growth for 5 years
CLX trades at a premium to our conservative estimate — investors expect above-average performance.
At $109, the market prices in 12% annual cash flow growth — a moderate expectation aligned with historical trends (8%).
Range: Bear $54 → Bull $156. Current price implies expectations above the base case, closer to bull expectations.
Discount ↓Growth →4%6%8%10%
8%$110$122$135$149
10%$72$80$89$99
12%$51$57$64$71
14%$38$43$48$54

Bull Case

  • Bull case ($156) offers 43% upside at 10% growth, 9% discount
  • Conservative 8% growth assumption is achievable based on track record

Bear Case

  • Bear case ($54) implies 50% downside at 6% growth, 12% discount
  • Price reflects 12% growth expectations vs 8% historical — high bar to clear
  • Trading 18% above base case — execution must exceed assumptions to justify
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5-Year Free Cash Flow Projection

Year 1$821.88M
Year 2$887.63M
Year 3$958.64M
Year 4$1.04B
Year 5$1.12B
Terminal$16.45B

📐 Model Inputs

Growth Rate8.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$761.00MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

Frequently Asked Questions

Is CLX stock undervalued or overvalued?
🟡 FAIRLY VALUED

CLX trades at $108.86, within 10% of our $89.35 intrinsic value estimate. At 10.0% WACC and 8.0% FCF growth, the market is pricing in assumptions roughly aligned with the 5-year historical CAGR. The valuation range spans $58.71 (bear) to $130.33 (bull).

What is CLX's intrinsic value?

Using a 5-year DCF model: Base FCF of $761M, projected at 8.0% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $2.71B net debt and dividing by 0.12B shares: Bear $58.71 | Base $89.35 | Bull $130.33. Current price $108.86 implies -11% to base case.

How is CLX's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 8.0% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($13.82B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 18.2x.