Summary

  • Stifel upgraded Colgate-Palmolive to a ‘buy’ rating, while cutting its price target on the stock to US$81 from US$85.
  • Among the 20 analysts covering the stock on EODHD/Others, eleven have rated it as a 'buy' or higher, while nine consider it a 'hold.'
  • The company announced a dividend of US$ 0.48 per common share, payable on November 15, 2023.

Colgate-Palmolive (NYSE: CL), the manufacturer of toothpaste, experienced a 1.4% increase in its stock value, reaching US$71.9, following a rating upgrade by Stifel from 'hold' to 'buy.' Stifel is optimistic about the company's organic sales growth in FY23.

The broker anticipates Colgate’s organic sales growth to be on the higher end of the 5% to 7% range. Stifel disclosed factors such as sustained pricing and improved sales volumes, particularly in the pet nutrition division as the major reason behind the projected sales growth.

Stifel predicts that easing inflation and pricing advantages will lead to expanded profit margins and increased earnings in the second quarter of FY23.

A lower price target despite rating upgrade

Stifel lowered its price target for Colgate from US$85 to US$81, but this new target still implies a 14.16% potential increase from the previous closing price. Meanwhile, the consensus price target on the stock, as per EODHD/Others data, is US$81.94, a 13% upside on Monday’s closing price.

The mean recommendation rating on CL is 2.4 on five. Here, one indicates a ‘strong buy’ rating while five represents a ‘strong sell’ rating.

Image Source: ©2023 Kalkine®; Data Source: EODHD/Others

Moreover, a total of 20 analysts have covered the stock, as per data available on EODHD/Others. Among these, eleven have rated it as a 'buy' or higher, while nine consider it a 'hold.' One analyst has also given CL a ‘strong sell’ rating, while none have given it a ‘sell’ rating.

Broker Wells Fargo also upgraded the stock recently to an ‘equal weight’ rating. Evercore ISI maintained an ‘outperform’ rating on the stock, in its recent review  on October 16, 2023.

Colgate sees stock price and revenue gains

Colgate reported a 7.5% increase in its net sales  to US$ 4.8 billion, with organic sales rising by 8% in Q2 2023. However, the company reported a 17% decline in EPS for the quarter to US$0.60.

Gross profit for the quarter was US$ 2.7 billion, while operating profit was US$974 million. Meanwhile, for the first six months of FY 2023, net cash provided by operations was US$ 1.45 billion.

The company’s global market share stood at 40.5% year to date and its share in the market for manual toothbrushes was 30.4% year to date.

The company also announced a dividend of US$ 0.48 per common share, which will be payable on November 15, 2023. The dividend will be paid to shareholders of record as on October 23, 2023.

CL Price Chart; Source: EODHD/Others

The stock closed at US$72.15, 1.7% higher on an intraday basis. Meanwhile it was 8.4% lower on a YTD basis. As at Monday’s close, CL has a dividend yield of 2.66% and a P/E ratio of 39.56x.