Where Does Colgate-Palmolive’s Valuation Stand Compared to Peers?



12-month forward PE

As of January 27, 2017, Colgate-Palmolive (CL) was trading at a 12-month forward PE (price-to-earnings) ratio of 22.2x. It’s currently trading at a higher valuation multiple than the S&P 500 Index, with a forward PE of 17.6x, and the S&P 500 Consumer Staples Index, with a forward PE of 20.3x.

Comparison with peers

As of January 27, 2016, Colgate-Palmolive’s forward PE multiple was higher than Procter & Gamble’s (PG), Clorox’s (CLX), and Kimberly-Clark’s (KMB). These three companies were trading at forward PE multiples of 21.6x, 21.7x, and 19.2x, respectively. Colgate-Palmolive also has a higher forward PE multiple than the average industry PE multiple of 20.3x.

The 12-month forward PE multiple differs among companies based on several factors such as growth expectations, leverage, profitability, and risk-return profiles.

Growth expectations

Currently, analysts expect Colgate-Palmolive (CL) to generate revenue of $15.7 billion in fiscal 2017. That would be a rise of 3.0% on a year-over-year basis. Analysts expect the company’s fiscal 2017 adjusted EPS (earnings per share) to be $2.96, a rise of 5.3%. Adjusted EPS excludes the impact of non-recurring items.

The company’s performance in fiscal 2017 is expected to be impacted by currency headwinds, challenging macro conditions, higher competition, and fluctuations in commodity prices. The company is trying to improve its performance through innovation, cost-saving initiatives, and initiatives that would increase customer engagement.

The adjusted EPS for Procter & Gamble, Clorox, and Kimberly-Clark is expected to rise 4.9%, 7.5%, and 4.1%, respectively, in fiscal 2017.

For more updates, be sure to visit our Consumer Products page.

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