New York-based Colgate-Palmolive Company (CL) is a global leader in the oral care hygiene market. It produces and distributions household, healthcare and personal care products. With a market cap of $73.7 billion, Colgate operates through Oral, Personal & Home Care and Pet Nutrition segments. The oral hygiene giant is set to announce its fourth-quarter earnings before the market opens on Friday, Jan. 31.
Ahead of the event, analysts expect Colgate to report a non-GAAP profit of $0.90 per share, up 3.5% from $0.87 per share reported in the year-ago quarter. The company has a robust earnings surprise history. It has surpassed Wall Street’s bottom-line expectations in each of the past four quarters. Its adjusted EPS for the last reported quarter grew 5.8% year-over-year to $0.91, exceeding analysts’ estimates by 3.4%.
For fiscal 2024, analysts project Colgate to report an adjusted EPS of $3.59, up 11.2% from $3.23 in fiscal 2023. Meanwhile, in fiscal 2025 its earnings are expected to grow 7.2% year-over-year to $3.85.
CL stock has gained over 12.8% in the past 52-weeks, which lagged behind the S&P 500 Index’s ($SPX) 26.3% surge but outperformed the Consumer Staples Select Sector SPDR Fund’s (XLP) 8.4% gains during the same time-frame.
Despite reporting better-than-expected earnings and revenue growth Colgate-Palmolive’s stock prices plunged 4.1% after the release of its Q3 results on Oct. 25. The company reported a notable 2.4% year-over-year growth in net sales to $5 billion, driven by a 6.8% surge in overall organic sales, exceeding Wall Street’s topline expectations. Moreover, due to effective cost management Colgate observed a notable expansion in its gross and operating margins, resulting in 4.1% growth in GAAP-based net income to shareholders, amounting to $737 million.
Although Colgate’s overall performance remained impressive, the company observed a net sales decline from two of its major revenue-contributing regions. Its net sales from the North America region declined 2.1% while Latin America’s net sales dropped 3.2% compared to the year-ago quarter, which unsettled investor confidence.
The consensus opinion on CL stock is moderately bullish, with an overall “Moderate Buy” rating. Out of the 23 analysts covering the stock, 11 recommend “Strong Buy,” two suggest “Moderate Buy,” eight advise “Hold,” and two advocate a “Strong Sell” rating. Its mean price target of $104.61 represents a 16% premium to current price levels.
