Rating and target price
The majority of analysts remain neutral on Colgate-Palmolive (CL) stock, since the company’s volumes continue to decline on the back of moderating category growth. However, through its cost-saving measures, the company remains successful in driving margins growth. Analysts on average maintain a consensus rating of 2.8 on a scale of 1.0 (“strong buy”) to 5.0 (“strong sell”). Of the 22 analysts covering CL stock, 14.0% maintain a “buy” rating, and 86.0% recommend a “hold.” As of July 13, 2017, the company was trading 4.3% below the analysts’ 12-month target price recommendation of $75.37.
Analysts continue to maintain a neutral outlook on consumer product companies as the slowdown in sales is keeping them on the sidelines. Of the 21 analysts providing ratings for Procter & Gamble (PG) stock, 38.0% have rated it a “buy,” 52.0% have maintained a “hold,” and 10.0% have recommended a “sell.” Of the 15 analysts covering Kimberly-Clark (KMB) stock, 7.0% have rated it a “buy,” 86.0% have maintained a “hold,” and 7.0% have recommended a “sell.” As for Clorox (CLX), 11.0% of the 18 analysts covering the stock have recommended a “buy,” 78.0% have rated it a “hold,” and 11.0% have rated it a “sell.”
As of July 13, 2017, Colgate-Palmolive stock was trading at a 12-month forward PE (price-to-earnings) multiple of 24.3x, which is above the peer average of 22.8x. The company’s stock is also trading at a premium when compared to the broader index. The S&P 500 Index (SPX-INDEX) and the Consumer Staples Select Sector SPDR ETF (XLP) were trading at forward PE multiples of 18.0x and 21.8x, respectively. On the same date, Procter & Gamble, Kimberly-Clark, and Clorox were trading at forward PE ratios of 21.5x, 19.5x, and 23.5x, respectively.