Hold Rating Maintained for Colgate-Palmolive Despite Strong Q1 Performance and Raised Guidance

Analyst Callum Elliott of Bernstein maintained a Hold rating on Colgate-Palmolive (CL – Research Report), with a price target of $100.00.

Callum Elliott’s rating is based on Colgate-Palmolive’s recent financial performance and outlook, which while positive, does not necessarily warrant an upgrade to a Buy rating at this time. The company’s first quarter results of 2024 showed significant strength, notably beating consensus estimates with a robust organic growth rate of 9.8%, which is almost double the expected figure. This growth was not solely due to inflationary pricing in regions such as Latin America and Africa, but also reflected genuine sales strength, surpassing the effects of foreign exchange headwinds.

Additionally, Colgate-Palmolive’s margins exceeded expectations, despite a substantial increase in advertising expenditure, which indicates efficient management and a successful growth-investment cycle. The company has also raised its full-year guidance for both organic and reported sales growth while maintaining its outlook for mid to high single-digit EPS growth. While these factors are indicative of a strong performance, Elliott maintains a Hold rating, possibly suggesting that the current stock price adequately reflects the positive developments without sufficient upside potential to justify a Buy rating. Elliott’s valuation includes an updated target price, reflecting an improved earnings per share outlook, yet the recommendation to maintain market performance suggests a cautious approach in anticipation of potential further positive developments during the year.

According to TipRanks, Elliott is a 3-star analyst with an average return of 5.0% and a 53.33% success rate. Elliott covers the Consumer Defensive sector, focusing on stocks such as Procter & Gamble, Keurig Dr Pepper, and Altria Group.

In another report released yesterday, Barclays also maintained a Hold rating on the stock with a $85.00 price target.

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Colgate-Palmolive (CL) Company Description:

Colgate-Palmolive Company is a multinational consumer products name engaged in production and distribution of household, personal care, oral care, health care, and veterinary products. The company sells its products across more than 200 countries and territories. The company’s well known global brands include Colgate, Palmolive, Speed Stick, Lady Speed Stick, Ajax, Softsoap and Hill’s pet Nutrition. It has two operating business segment – Oral, Personal and Home Care, and Pet Nutrition.