Colgate Palmolive Co Exceeds Sales Growth Target, Receives Positive Analyst Rating

By Don Francis, Editor
May 16, 2024 7:50 AM UTC
Colgate Palmolive Co Exceeds Sales Growth Target, Receives Positive Analyst Rating

Argus Research's Chris Graja raised their price target on Colgate Palmolive Co (NYSE: CL) by 10.3% from $97 to $107 on 2024/05/15. The analyst maintained their Strong Buy rating on the stock.

Graja pointed to the quarter's earnings beat as the catalyst for their price target hike, adding that Argus Research "has a favorable view of its products with natural ingredients and new pet foods for younger pets and for older pets with kidney problems."

The analyst noted that the company "has met or exceeded its long-term organic sales growth target of 3% to 5% four consecutive years."

Colgate-Palmolive Company reported strong first quarter earnings, with EPS of $0.86, beating the Zacks Consensus Estimate of $0.82 and showing a 17.8% increase compared to Q1 2023's $0.73. Revenue for the quarter came in at $5.07 billion, surpassing the Zacks Consensus Estimate of $4.95 billion and representing a 6.2% increase from Q1 2023's $4.77 billion.

Colgate-Palmolive's management updated its full-year 2024 guidance, now expecting revenue growth of 2% to 5% compared to the previous guidance of 1% to 4%. The company also anticipates gross profit margin expansion, increased advertising investment, and mid to high-single-digit EPS growth.

Noel Wallace, Chairman, President & CEO of Colgate-Palmolive, expressed satisfaction with the company's strong performance in the first quarter. He highlighted the double-digit growth in operating profit, net income, and EPS for the third consecutive quarter, even while investing in the long-term health of the business. Wallace also emphasized the company's commitment to brand investment and the development of capabilities in areas like innovation, digital, data and analytics, revenue growth management, and marketing effectiveness.

Looking ahead, analysts have a consensus forecast for Colgate Palmolive Co's upcoming year, predicting earnings per share (EPS) of $3.52. If these projections hold true, it would mean an 11% year-over-year increase in EPS.

Despite the positive analyst rating and strong earnings, Colgate Palmolive Co's stock price has dipped by 0.6% since the latest quarterly report. However, when compared year-over-year, the stock has seen a healthy increase of 16.6%. It is worth noting that during this period, Colgate Palmolive Co has trailed behind the broader market, with the S&P 500 experiencing a 28.3% increase.

Chris Graja, the Argus Research analyst who raised the price target on Colgate Palmolive Co, is ranked in the top 15% of Wall Street analysts by WallStreetZen. With an average return of 11.4% and a win rate of 66%, Graja specializes in analyzing the Basic Materials and Consumer Defensive sectors, among others.

Colgate-Palmolive Company, founded in 1806 and headquartered in New York, NY, offers a wide range of household, healthcare, and personal care products. The company's portfolio includes well-known brands such as Ajax, Axion, and Palmolive dishwashing liquids, as well as Ajax, Fabuloso, and Murphy household cleaners. Colgate-Palmolive also owns Hill's, a specialty pet food maker that distributes its products through veterinarians and specialty pet retailers.

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