Colgate-Palmolive (CL) stock has risen more than 10% so far this year. However, its current valuation doesn’t support its upside. Colgate-Palmolive stock is trading at 231x its 2019 projected EPS of $2.85, which seems expensive, as its 2019 EPS are likely to fall on a YoY (year-over-year) basis.
In comparison, Procter & Gamble (PG) and Kimberly-Clark (KMB) are trading at lower multiples. PG is trading at a forward PE multiple of 21.3x, while KMB is trading at 17.7x. Also, both Kimberly-Clark and Procter & Gamble offer better dividend yields than Colgate-Palmolive. The Clorox Company (CLX) and Church & Dwight (CHD) are trading at slightly higher multiples than Colgate-Palmolive. However, both of these companies offer better growth potential.
Ratings and target price
The majority of analysts covering Colgate-Palmolive stock remain on the sidelines. Among the 22 analysts covering the stock, 14 have given it “holds,” six have given it “buys,” and two have given it “sells.”
Analysts have set a target price of $63.83 per share on Colgate-Palmolive stock, which implies a potential downside of 3.0% based on its closing price of $65.79 on February 11.
Wall Street also remains on the sidelines on Procter & Gamble, Kimberly-Clark, Clorox, and Church & Dwight. Currency volatility, input, transportation cost headwinds, and increased competition are expected to limit their upsides.