Is Colgate-Palmolive Stock Poised for Further Growth Following a 15% Increase This Year?

Colgate-Palmolive reported strong Q1 results with revenues and earnings above street estimates. Despite this, the stock is seen as fully valued at $93. The stock has seen gains of 10% from early January 2021 to around $95, but its performance has been inconsistent, with underperformance compared to the S&P 500 in 2021 and 2023. The Trefis High Quality Portfolio, on the other hand, has consistently outperformed the S&P 500 over the same period, providing better returns with less risk.

In the current uncertain macroeconomic environment, with high oil prices and elevated interest rates, it remains to be seen if Colgate-Palmolive will face similar underperformance in the next 12 months or see a strong jump. From a valuation perspective, the stock is deemed appropriately priced at $91 per share, close to its current market price of $93. The company’s revenue in Q1 was up 6% year-over-year, driven by growth in Oral, Personal, and Home Care, as well as Pet Nutrition segments. Adjusted earning per share also saw a significant increase of 18% to $0.86 in Q1’24.

Looking forward, Colgate-Palmolive expects organic sales to continue rising between 5% and 7%, with adjusted earnings expected to increase in the mid-to-high single digits. While the company is expected to navigate well in the near term, with pricing gains and volume growth in key segments, much of these positives are already priced in. Investors looking to enter may be better off waiting for a dip to garner robust long-term gains. Colgate-Palmolive’s peers also play a role in understanding how the company stacks up against others in the industry.

It is important to consider how Colgate-Palmolive’s peers fare on metrics that matter. By looking at peer comparisons, investors can gain a better understanding of how the company compares to others in the industry. Ultimately, while Colgate-Palmolive’s stock may be fully valued at the moment, keeping an eye on key performance indicators and industry trends can help investors make informed decisions about their investment strategies.