On Friday, Stifel reiterated a Buy rating on Colgate-Palmolive Company (NYSE:CL) with a stable price target of $105, following the company's robust second quarter performance in 2024. Colgate-Palmolive's results surpassed market expectations in both sales and earnings before interest and taxes (EBIT), alongside earnings per share (EPS).
The company's volume growth was particularly impressive, marking a 4.7% increase, which is the highest since 2020. This growth represented a 120 basis points sequential acceleration on a two-year basis and was consistent across all geographic and operating segments. Stifel's analysis suggests that this growth indicates Colgate-Palmolive's market share gains and is a reflection of the company's strategic investments in advertising, research and development, and mergers and acquisitions, especially in their Hill's pet nutrition segment.
Stifel anticipates that Colgate-Palmolive's volume growth will be at the upper end compared to its competitors, which could lead to a modest increase in the company's stock multiple. The firm has projected an earnings multiple of 17 times the estimated 2025 EBITDA.
Despite challenges such as currency fluctuations and the need for continued reinvestment, Stifel expects Colgate-Palmolive to achieve substantial EBIT growth. The firm believes that the combination of strong volume growth and continued gross margin expansion will position Colgate-Palmolive favorably for ongoing market share gains.
In other recent news, Colgate-Palmolive has been the subject of several significant developments. The company's Q1 2024 results showed a robust 6% net sales growth and a significant improvement in gross margins by 310 basis points, despite foreign exchange headwinds. This strong performance is expected to set the stage for a promising year, with projected mid to high single-digit base business earnings per share growth.
Deutsche Bank raised its price target for Colgate-Palmolive to $104, maintaining a Buy rating due to an anticipated upward risk to the company's full-year earnings and organic sales growth forecasts. Similarly, Morgan Stanley increased its price target to $103, citing confidence in the company's ability to sustain high operational and earnings growth. Argus also raised its price target to $107, maintaining a Buy rating due to the company's consistent organic sales growth and commitment to product innovation.
Finally, Jeff Duncan, representative of South Carolina's 3rd congressional district, sold stocks in Colgate-Palmolive from his Raymond James IRA, reflecting a shift from individual stocks to a more diversified retirement savings plan. These recent developments highlight the active interest and ongoing changes in Colgate-Palmolive's market performance and strategic positioning.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.