Rating and target price
Most of the analysts covering Colgate-Palmolive (CL) continue to maintain a “neutral” outlook on the stock. Through its productivity savings and cost-cutting initiatives, CL managed to drive its bottom-line growth amid a soft sales environment. The company’s management remains upbeat and expects new, innovative products in its natural and premium segments to help drive its top-line growth in the coming quarters. Its margins are projected to benefit from its ongoing restructuring initiatives.
However, a slowdown in demand in major markets such as the United States (SPY) and Greater China, the volatility in India, the macroeconomic challenges in Brazil, and currency headwinds are likely to restrict the company’s top-line growth. Increased advertising spending, higher raw material costs, and increased competition will continue to hurt its margins and keeps analysts on the sidelines.
Analysts are maintaining a consensus score of 2.8 on CL stock on a scale of 1.0 (“strong buy”) to 5.0 (“strong sell”). Of the 22 analysts providing recommendations for Colgate-Palmolive stock, 14.0% have rated it a “buy,” and 86.0% are maintaining a “hold.” CL stock closed at $73.27 on July 21, 2017, representing an implied upside of 3.1% to analysts’ 12-month target price recommendation of $75.53 per share.
Analysts are also maintaining a “neutral” outlook on CL’s peers due to moderating category growth and a slowdown in demand. Of the 22 analysts covering Church & Dwight (CHD) stock, 14.0% are maintaining a “buy,” 59.0% have rated it a “hold,” and 27.0% have recommended a “sell.” Of the 21 analysts covering Procter & Gamble (PG) stock, 38.0% are maintaining a “buy,” 52.0% have recommended a “hold,” and 10.0% have rated it a “sell.” As for Kimberly-Clark (KMB) stock, 7.0% of the 15 analysts have rated it a “buy,” 86.0% have recommended a “hold,” and 7.0% are maintaining a “sell.”