Is Colgate-Palmolive Stock Underperforming the Dow?
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.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.