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Exane BNP Paribas Downgrades Colgate-Palmolive to ‘Neutral’

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Price movement

Colgate-Palmolive (CL) has a market capitalization of $66.5 billion. It rose by 1.6% to close at $74.43 per share on July 29, 2016.

The stock’s weekly, monthly, and year-to-date (or YTD) price movements were -0.24%, 4.1%, and 13.6%, respectively, on the same day. CL is trading 0.99% above its 20-day moving average, 3.3% above its 50-day moving average, and 9.4% above its 200-day moving average.

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Related ETF and peers

The iShares Russell 1000 Growth ETF (IWF) invests 0.11% of its holdings in Colgate-Palmolive. The ETF tracks an index of US large- and mid-cap stocks selected from the Russell 1000 Index with the highest growth characteristics, based on Russell’s style methodology. The YTD price movement of IWF was 6.1% on July 29.

The market capitalizations of Colgate-Palmolive’s competitors are as follows:

  • The Procter & Gamble Company (PG) — $230.1 billion
  • The Clorox Company (CLX) — $17.0 billion
  • Church & Dwight Co. (CHD) — $12.7 billion

Colgate-Palmolive’s rating

Exane BNP Paribas has downgraded Colgate-Palmolive’s rating to “neutral” from “outperform.” It’s also set the stock’s price target at $76.0 per share.

Performance of Colgate-Palmolive in 2Q16

Colgate-Palmolive reported 2Q16 net sales of $3.8 billion, a fall of 7.3% compared to net sales of $4.1 billion in 2Q15. Sales of its oral, personal, and homecare (or OPHC) segment in Latin America, Asia Pacific, and Africa and Eurasia fell by 16.7%, 7.3%, and 5.9%, respectively, and sales of its OPHC segment in North America and Europe rose by 1.7% and 0.66%, respectively, in 2Q16 compared to 2Q15.

Sales of CL’s pet nutrition segment rose by 3.6% in 2Q16. The company’s gross profit margin and operating profit rose by 3.4% and 1.3%, respectively, in 2Q16 compared to the prior year’s period.

Its net income and EPS (earnings per share) rose to $600.0 million and $0.67, respectively, in 2Q16 compared to $574.0 million and $0.63, respectively, in 2Q15. It reported non-GAAP (generally accepted accounting principles) EPS of $0.70 in 2Q16 and 2Q15.

Colgate-Palmolive’s cash and cash equivalents and inventories rose by 11.9% and 4.4%, respectively, in 2Q16 compared to 4Q15.

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