CHURCH & DWIGHT CO., INC. (CHD): what the price requires

At today's price, CHURCH & DWIGHT CO., INC. (CHD) is priced for +5.5% growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.

Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/CHD

Headline

FieldValue
TickerCHD
CompanyCHURCH & DWIGHT CO., INC.
Current price$96.93/sh
CompositionHousehold Products 41% / Personal Care Products 36% / Total Consumer International 18% / Total SPD 5%

What The Price Requires (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basiswhole-company
Operating margin needed8.5%
Operating margin today18.3%
Margin compression implied-9.8pp
Implied growth5.5%
Multiple paid23x operating income

The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration solve.

Solve inputs: computed at a 7.3% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~8.1pp.

Reconcile: at the x-ray's 9.3% required return this reads ~20.2%/yr; the models below use their own rates.

How unusual the bet is: within-range

ReferenceValue
vs own history-0.38σ
cohort percentile (of 69 peers)65
implied end-window share0%

Valuation X-Ray

Every valuation family lands below the price. The price therefore requires assumptions beyond what those standard frames encode.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

FamilyMedian price/FVModelsReads
Asset2.79x5expensive
Earnings2.95x3expensive
Relative1.39x5expensive
Growth1.43x2expensive

Families that call it expensive: Asset, Earnings

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.5%); the inversion above states its own rate.

Per-Model Detail (n=15)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth$0.00—noFCF base $0.0B, growth 2% (input: historical growth), terminal g 2.2%, WACC 8.5%, 5yr projection
DCF Exit MultipleGrowth$68.211.42xyesExit EV/EBITDA: 16.9x / 18.9x / 20.9x (bear / base = today's held flat / bull), 5yr
Relative ValuationRelative$69.601.39xyesP/E 22x (static sector reference · 2026-04), scenarios: 18.6x / 22.0x / 25.4x (bear / base = reference held flat / bull), EV/EBITDA 14x
Simple DDMGrowth——no—
Two-Stage DDMGrowth——no—
Simple Excess ReturnAsset$33.282.91xyesBV/sh $17.58, ROE (TTM) 17.5%, ke 9.3%
Two-Stage Excess ReturnAsset$45.202.14xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth$67.281.44xyesRev $6.2B, growth 2% (input: historical growth; tapered), Terminal P/S: 3.1x / 3.7x / 4.3x (bear / base = today's held flat / bull, cap 8x)
Peter Lynch Fair ValueRelative$106.400.91xyesEPS $3.04, growth 35% (input: historical EPS growth), PEG=0.90 (Undervalued)
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings$31.213.11xyesNormalized EBIT (5y avg op income, one-time charges added back) $0.99B × (1−21%) / WACC 8.5% → EPV (no growth)
Residual IncomeAsset$45.192.14xyesBV $17.58 + 5yr PV of (ROE (TTM) 17.5% − Kₑ 9.3%) × BV; BV grows 8.8%/yr
Graham NumberAsset$34.682.79xyes√(22.5 × EPS $3.04 × BVPS $17.58) — Graham's conservative floor
EV/EBITDA RelativeRelative$69.901.39xyesEBITDA $1.32B × sector EV/EBITDA 14.0x
FCF YieldEarnings$0.019693.00xyesFCF $37.0M / Kₑ 9.3% — zero-growth perpetuity (excluded from median)
SBC-Adj FCF YieldEarnings——no—
Ben Graham FormulaEarnings$98.090.99xyesEPS $3.04 × (8.5 + 2×15.0%) × (4.4 / 5.3%)
ROIC-Justified P/BAsset$7.9212.24xyesBV $17.58 × (ROIC 3.8% / WACC 8.5%)
P/Sales SectorRelative$52.121.86xyesRevenue $6.21B × sector P/S 2.0x
PEG Fair ValueRelative$114.000.85xyesEPS $3.04 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x
Earnings YieldEarnings$32.862.95xyesEPS $3.04 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Solvency

FieldValue
Net debt$1.7b
Net debt / NOPAT (after-tax)1.95x
Net debt / operating income (pre-tax)1.54x
Interest coverage11.7x
Share count CAGR (buyback)-0.9%
Burning cashno

Bullet Takeaways

At $95.63 the price pays about 22x company-wide operating income, which inverts to roughly 5.6% operating-profit growth per year for five years. That is within what Church & Dwight has historically delivered, and the multiple sits in the upper half of its consumer-staples peer range.

The recent trajectory supports the bar. Q1 2026 organic sales grew 5.0%, ahead of the 3% outlook, on volume up 5.3%, and adjusted gross margin expanded 130 basis points to 46.4% even after absorbing inflation and tariffs.

The question is not whether the business is good but whether 22x leaves room if the growth or margin expansion that justifies the premium slows.

Bull Case

The earnings trajectory is the foundation of the bull case, and it is genuinely strong for a consumer-staples company. Q1 2026 organic sales grew 5.0%, well above the 3% outlook, with growth across all three divisions and, crucially, driven by volume up 5.3% rather than price. Volume-led growth is the higher-quality kind, because it means consumers are buying more units, not just paying more, which is harder to sustain when budgets tighten. Adjusted EPS of $0.95 grew 4.4% and beat the $0.92 outlook, and the U.S. consumer business grew organic sales 5.4% on strong performances from THERABREATH, ARM & HAMMER, HERO, and OXICLEAN. For a company priced for about 5.6% operating-profit growth, delivering 5% organic volume-led growth is the business meeting its bar.

The margin story is the second leg and it is impressive given the environment. Adjusted gross margin expanded 130 basis points to 46.4% in the quarter, with productivity programs, acquisitions, and favorable FX more than offsetting 190 basis points of inflation and tariffs. Absorbing nearly two points of cost pressure and still expanding margins is exactly the operational discipline that lets a staple grow earnings faster than revenue. Management guides to 100 basis points of adjusted gross-margin expansion and 5% to 8% adjusted EPS growth for the full year, a credible plan that compounds nicely off the volume momentum.

The third leg is the durable, low-volatility franchise. Church & Dwight runs a portfolio anchored by power brands across household and personal care, and the business is defensive by nature, with a beta of just 0.68 reflecting how stable demand for laundry, oral care, and personal-care staples is through cycles. The company funds bolt-on acquisitions that add to its power-brand stable while paying a long-standing dividend, and interest coverage above 11x on modest leverage (net debt near 1.6x operating income) leaves ample flexibility. For a buyer who values predictable, volume-led growth from a disciplined operator in recession-resistant categories, the premium multiple is the price of owning one of the better-run names in consumer staples, and the recent results show the engine working.

Bear Case

The bear case is about narrative dependency: the price has baked in a specific future of steady organic growth and continued margin expansion, and the most fragile assumption is that both persist together at the upper end of the peer multiple. At 22x operating income, the stock is priced for roughly 5.6% sustained operating-profit growth, and the reported top line is already much weaker than the organic figure. Q1 2026 net sales rose just 0.2%, and full-year guidance is for net sales of negative 1.5% to negative 0.5%, because the company is exiting product lines. The 5% organic number is real and impressive, but the headline revenue is roughly flat, which means the growth premium rests on the organic story holding while the reported business treads water. If organic growth decelerates toward the low end of the 3% to 4% guidance, the premium multiple loses its justification quickly.

The specific structural risk the price underweights is the retail environment, and the 10-K names it directly. The filing warns that an increase in consumers purchasing more private-label or other lower-price brands has increased competition, and that retailers using evolving technology to develop more complex pricing models has led to pricing pressures in some categories (FY2025 10-K, accession 0001193125-26-048139). Even more pointed, the filing notes that protracted unfavorable market conditions have caused many of its customers to more critically analyze the number of brands they sell, and reduce or discontinue certain product lines, particularly those that were not number one or two in their categories. That is a real threat to a portfolio that mixes leading brands with smaller ones, and it is exactly why the company is exiting product lines. Private-label encroachment in a value-conscious consumer environment directly pressures the volume-led growth and the margins the bull case depends on.

The third issue is that the margin expansion has a ceiling and the comparisons get harder. The 130-basis-point gross-margin gain came from productivity, acquisitions, and FX offsetting inflation and tariffs; each of those is finite. Productivity programs eventually exhaust the easy savings, FX is a swing factor that can reverse, and tariffs and input costs could intensify. A staple priced in the upper half of its peer range has little cushion if margin expansion flattens while organic growth normalizes. The bear case is not that Church & Dwight is a poor business; it is that paying a premium for a low-growth staple requires the growth and margin story to keep exceeding a flat reported top line, and the retail backdrop the company itself flags makes that harder than the price assumes.

Valuation

Church & Dwight is a high-quality staple trading at a quality premium, and the inversion makes the bar concrete. At about 22x company-wide operating income the price implies roughly 5.6% operating-profit growth per year for five years, computed at a 7.3% cost of capital with 4% terminal growth. The near-term pace is within what the company has recently delivered (Q1 2026 organic growth was 5.0%), so the stretch is in durability rather than the rate, and the multiple sits in the upper half of the consumer-staples peer range.

No valuation family reaches the price, which is the normal signature of a premium-priced quality compounder. The growth and relative-multiple methods land closest (DCF exit-multiple near $67, relative valuation near $70, EV/EBITDA-relative near $70, discounted-future-market-cap near $66), the earnings-power and asset methods land lower (Earnings Power Value near $31, excess-return methods near $33 to $45, Graham Number near $35), and only the most growth-optimistic methods (Peter Lynch near $106, PEG near $114, Ben Graham Formula near $98) exceed the quote. The honest read is that on grounded, current-earnings methods Church & Dwight looks fully valued to modestly expensive, and the gap to the price is the premium the market assigns to a low-volatility, brand-led franchise with consistent execution. The valuation question is whether that premium is justified by durability. If organic volume-led growth and margin expansion persist as in Q1, a staple this consistent rarely trades cheap and the premium holds. If the reported top line stays flat while organic growth fades toward the low end of guidance and private-label pressure builds, the premium compresses toward the relative-valuation methods near $70, and 22x proves a full price for mid-single-digit growth.

Catalysts

The Q1 2026 report was the recent catalyst and it beat across the board. Organic sales grew 5.0% versus a 3% outlook on volume up 5.3%, adjusted EPS of $0.95 beat the $0.92 outlook and grew 4.4%, and adjusted gross margin expanded 130 basis points to 46.4% despite 190 basis points of inflation and tariffs. The U.S. consumer business grew organic sales 5.4% led by THERABREATH, ARM & HAMMER, HERO, and OXICLEAN. Management guided full-year 2026 to organic sales growth of 3% to 4%, 100 basis points of adjusted gross-margin expansion, adjusted EPS growth of 5% to 8%, and operating cash flow of $1.15 billion. The next prints are a test of whether the volume-led organic momentum holds as comparisons get harder and whether margin expansion continues against the cost backdrop.

The forward watch items are the consumer environment, the retail channel, and the brand portfolio. Volume-led growth depends on consumers trading up to or staying with Church & Dwight brands rather than private label, which the 10-K flags as an intensifying competitive pressure, so the value-consumer dynamic is the key demand variable. Retailer brand-rationalization, where customers cut the number of brands they carry, is a structural risk to smaller lines and is part of why the company is exiting products. On the upside, bolt-on acquisitions that add power brands, new product launches in faster-growing categories like THERABREATH and HERO, and continued margin productivity are the catalysts that sustain the premium. For a staple priced in the upper half of its peer range, the catalysts that matter are durable organic growth, margin progression, and accretive M&A; the risks are private-label pressure, a value-driven consumer pullback, and slowing margin expansion.

Sources: Church & Dwight reports Q1 2026 results (IR), Church & Dwight Q1 2026 organic growth and margin expansion (GuruFocus), Church & Dwight Q1 2026 earnings transcript (Motley Fool), Church & Dwight FY2025 10-K.

Peer Cohorts (Per Segment, With Filing Citations)

Consumer Domestic (reported)

Consumer International (reported)

SPD (Specialty Products) (reported)

Methodology Note

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

View the full interactive CHD report on boothcheck