Can Clorox Clean up in a Recession?

But should the economy's troubles linger and deepen, Clorox may benefit from some longer-term insulating factors.

In particular, says Bob Goldsborough of Ariel Capital Management, the global resin supply could jump 30% because Saudi Arabia is expected to boost production capacity in the next year or two. "Resin matters so much more than anything else for Clorox," he says.

In January the company also unrolled its first new product line in two decades -- Green Works cleaners. The plant-based line of cleaning products, sold in recycled packaging, will carry a Sierra Club endorsement.

The line, of course, will face the same obstacles in a recession as the company's staples because consumers may not be willing to pay a premium for a brand-name or eco-friendly cleaning product. Nevertheless, Green Works "may be one of the biggest new product launches in Clorox's history," says Connie Maneaty, an analyst with BMO Capital Markets.

The company's $925 million acquisition of Burt's Bees similarly points to a new direction for Clorox. The line of beeswax personal-care products-birthed out of a home-based honey business in the '80s-generated $170 million in revenues in 2007.

The expensive acquisition is expected to clip earnings by 10 to 15 cents in fiscal 2008. But Burt's will benefit from Clorox's extensive distribution capacity and is expected to be a strong bonus in fiscal 2009.

Analysts advise investors to keep their eyes on the company's volume growth, which will be a key indicator of whether consumers are switching to generic brands, when the company releases earnings February 4. Maneaty rates the stock "outperform" and gives it a price target of $74. Clorox closed at $63.09 February 1, up 2.9%.

Could Clorox be the canary in the coal mine? Probably not. As Maneaty points out, the unusually wide 20-cent range of earnings estimates, from 44 cents to 64 cents per share, signals that there's some confusion surrounding expectations for the company.

But if the company doesn't deliver the average earnings estimate of 54 cents per share, the stock will almost certainly take a beating from an anxious Wall Street. Patient investors, however, could find a buying opportunity in a proven company.