Investment Research report

WD-40 Company

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WD-40 Company
A Slippery Slope Investment
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WD-40 Company
Update: A Slippery Slope Investment
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WD-40 Company
Update 2: A Slippery Slope Investment
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WD-40 Company
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WD-40 Company
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WD-40 Company
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WD-40 Company
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Research Overview

S&P 500
Consumer Discretionary
Oct 18, 2022

After conducting a forensic financial and accounting review, Spruce Point believes WD-40 (Nasdaq: WDFC), a penetrating oil manufacturer, faces both long and short-term secular pressures, will have to drastically reduce its optimistic 3% – 7% sales target and will need to re-set investor expectations meaningfully lower. Based on our latest investigation, we estimate 55% to 60% downside risk, or $75-$85 per share.

The reports highlight several key concerns with the company, including:

  • We believe that at its core, WD-40 is an oil-based lubricant being sold at above market prices and heavily dependent on its brand equity
  • We find numerous signs that the business is exposed to much greater risk today vs. the last crisis
  • Evidence shows that few, if any, growth avenues are left and other distribution channels look full
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