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How Analysts Reacted to Colgate-Palmolive’s 4Q Earnings


Jan. 30 2018, Updated 10:32 a.m. ET

Multiple analysts lowered price target

Multiple analysts lowered their price target on Colgate-Palmolive (CL) stock following its 4Q17 earnings. The company’s profit margins remained pressured owing to the increase in packaging and raw material costs. Besides, investment in pricing to drive volumes further remained a drag. Jefferies lowered its target price on Colgate-Palmolive stock to $77 from $79. Meanwhile, Morgan Stanley reduced its price target to $82 per share from $83. Also, Deutsche Bank lowered its price target from $79 to $76 on Colgate-Palmolive stock.

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Analysts expect the company’s sales to gain from new product launches supported by stepped up investments in advertising. Meanwhile, the company’s bottom line is likely to gain from cost and productivity saving measures, lower taxes, and favorable currency rates in the coming quarters. However, increased competition from local players, price investments, higher advertising spending, and inflation in packaging and raw material prices could continue to hurt its margins.

Rating and target price summary

The graph shows that about 70.0% of the 23 analysts covering Colgate-Palmolive stock maintained a “hold” recommendation. Meanwhile, 26.0% suggested a “buy,” and 4.0% had a “sell” rating. Moreover, CL stock closed at $73.56 on January 26, 2018, which represents an upside of 4.0% when compared to the analysts’ 12-month consensus price target of $76.49 per share.

In comparison, analysts also maintain a “neutral” outlook on the company’s peers including Procter & Gamble (PG), Church & Dwight (CHD), Clorox (CLX), and Kimberly-Clark (KMB). Increased competition, higher commodity prices, and price investments are expected to restrict the upside of these companies in coming quarters.


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