On Monday, BMO Capital Markets resumed coverage on Church & Dwight Co. Inc. (NYSE:CHD), bestowing an Outperform rating and setting a price target of $230.00. The new rating follows a temporary halt in coverage due to Enerplus (NYSE:ERF)'s acquisition, which has now been completed. The acquisition is recognized for providing Church & Dwight with a significant boost in scale within the Bakken region, where the company now holds approximately a 10-year inventory.
The firm expressed a positive outlook on Church & Dwight's future, highlighting the enhanced size and scale expected to bring about operational efficiencies and an improved valuation. The analyst from BMO Capital Markets emphasized the company's strong free cash flow (FCF) yield and its low leverage as key factors that should enable Church & Dwight to continue delivering robust capital returns to its shareholders.
Furthermore, the firm's commentary noted an appreciation for Church & Dwight's oil-weighted portfolio. The analyst believes that the company is well-positioned to capitalize on this aspect and sees potential for Church & Dwight to further expand its presence in the Bakken region.
The endorsement of Church & Dwight's strategy underlines the firm's confidence in the company's ability to leverage the recent acquisition to its advantage. The new price target of $230.00 reflects an optimistic view of Church & Dwight's prospects for growth and value creation following the integration of the Enerplus acquisition.
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