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Analysts’ Views on Colgate-Palmolive, Post-1Q18 Results

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Multiple analysts lower target prices

Numerous analysts covering Colgate-Palmolive (CL) stock decreased their target prices after the company’s 1Q18 results. Jefferies dropped its price target to $67 per share from $77, Wells Fargo reduced it to $68 from $73, and Berenberg lowered its target price to $67 from $69. The graph below shows the decline in analysts’ target prices for Colgate-Palmolive stock.

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Ratings and price target summary

Of the 21 analysts covering Colgate-Palmolive stock, 67.0% recommended “hold.” 28.0% recommended “buy,” and 5.0% recommended “sell.” The company’s sales are expected to increase in future quarters, driven by improved volumes and pricing coupled with favorable year-over-year comparables. Also, lower tax and productivity savings are expected to push its bottom line higher.

However, soft category growth, increased competition, a tough retail environment, and challenges in emerging markets are expected to hurt its sales growth, and input cost inflation and increased advertising to support new products are expected to hurt its margins.

Analysts have given Colgate-Palmolive stock a target price of $73.84, which represents an ~11% upside potential based on its April 27 closing price of $66.58. In comparison, most analysts have recommended “hold” for peers Clorox (CLX), Church & Dwight (CHD), Kimberly-Clark (KMB), and Procter & Gamble (PG).

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