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Analyst: Church & Dwight's shares at a good price

Fri, 08/27/2010 - 8:13am
The Associated Press

Church & Dwight Co. Inc.'s stock has fallen enough that it now represents an attractive entry point for investors, an analyst said Friday as he upgraded shares of the maker of Arm & Hammer, Nair, Orajel, and Kaboom bathroom cleaner.

THE OPINION: BMO Capital Markets analyst Connie M. Maneaty raised her estimates to "Outperform" from "Market perform" for the Princeton, N.J.-based company. She noted shares have been falling since the company's second-quarter results earlier this month, when analysts cut their second-half estimates because of higher marketing and promotion spending.

She said the company's "earnings power is unchanged." Shares are trading at a multiple that's at the low end of their 15-year range. But the stock has room for growth, she said.

"(Church & Dwight) is still gaining share with a portfolio that is well suited to the economy's cycles," she said, noting its liquid detergents, Trojan condoms and Arm & Hammer cat litter as all doing well now.

She said an acquisition is "inevitable" because of the company's leverage, though it's not clear when that would be. The company also feels less pain from foreign currency fluctuations because only 20 percent of its sales are outside the U.S.

She has a $75 target share price.

THE STOCK: Shares rose $1.03 to $61.50 in morning trading Friday, in the middle of their 520week range of $54.54 to $69.95.

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