Analysts maintain a neutral outlook
The majority of Wall Street analysts maintain a neutral outlook on Colgate-Palmolive (CL) stock. Analysts expect a heightened promotional environment and adverse currency rates to hurt the company’s top line, which they expect to decline in the third quarter. Meanwhile, soft sales and higher raw and packaging material costs are expected to hurt its margins in the near term. Also, the company’s EPS growth rate is expected to slow down significantly.
Earlier, the company’s management lowered its full-year sales and earnings outlook, which is disheartening and indicates continued pressure on the top and bottom line. The company’s adjusted EPS is now projected to mark mid-single-digit growth in 2018, down from its earlier growth guidance of 10%.
Rating and target price
Among 21 analysts covering Colgate-Palmolive stock, 15 analysts maintain a “hold” recommendation, five analysts suggest a “buy,” and one analyst has a “sell” rating. Analysts have a consensus target price of $67.55 per share on CL stock, which indicates an upside of 7.9% based on its closing price of $62.61 on October 16.
In comparison, the majority of analysts also maintain a “hold” rating on other major consumer packaged goods (or CPG) companies including Procter & Gamble (PG), Kimberly-Clark (KMB), Clorox (CLX), and Church & Dwight (CHD). Soft sales and margin headwinds are likely to restrict the upside in CPG stocks.