New York-based Colgate-Palmolive Company (CL) is a global leader in the oral hygiene market. It produces and distributions household, healthcare and personal care products. With a market cap of $74.5 billion, Colgate operates through Oral, Personal & Home Care and Pet Nutrition segments.
Companies worth $10 billion or more are generally described as 'large-cap stocks,' Colgate fits this bill perfectly. Given the company’s centuries-old history, extensive customer base, and world-renowned brand name, its valuation above this mark is unsurprising.
Colgate-Palmolive touched its all-time high of $109.30 on Sept. 5, 2024, and is currently trading 14.6% below that peak. Over the past three months, CL stock has dipped 1%, outperforming the Dow Jones Industrials Average’s ($DOWI) 4.6% decline during the same time frame.
However, over the longer term, Colgate’s performance looks much grimmer. CL stock prices gained 7% over the past 52 weeks and plunged 13.5% over the past six months, underperforming Dow’s 10.1% gains over the past year and 5.5% returns over the past six months.
To confirm the downturn, CL stock has traded mostly below its 50-day moving average since early October and below its 200-day moving average since late October 2024 with some fluctuations.
Colgate-Palmolive’s stock prices dropped over 4.6% after the release of its mixed Q4 results on Jan. 31. The company observed a 12 basis point decline in net sales compared to the year-ago quarter to $4.9 billion, missing the Street’s expectations by 72 basis points, which unsettled investor confidence. While the company experienced a slight decline in COGS leading to gross margin expansion, its SG&A expenses increased 5.1% year-over-year to $1.9 billion, which led to a slight contraction in operating margin and a marginal decline in operating profits to $1.1 billion.
On a positive note, Colgate’s non-GAAP net income increased 3.5% year-over-year to $745 million and its non-GAAP EPS of $0.91 exceeded the consensus estimates by 2.3%.
Colgate has also underperformed its peer Kimberly-Clark Corporation’s (KMB) 14.1% surge over the past year and a 3.1% dip over the past six months.
Among the 23 analysts covering the CL stock, the consensus rating is a “Moderate Buy.” Its mean price target of $98.43 represents a 5.5% premium to current price levels.
