Stifel Recommends Buying Colgate with $105 Target - Investing.com

On Friday, investment firm Stifel reiterated a buy rating on Colgate-Palmolive Company (NYSE:CL) with a steady price target of $105. This follows the company's impressive second quarter performance in 2024, which exceeded market expectations in terms of both sales and earnings before interest and taxes (EBIT) as well as earnings per share (EPS). 
 
Colgate-Palmolive achieved remarkable volume growth during this period, marking a 4.7% increase—the highest since 2020. The growth represented a sequential acceleration of 120 basis points over two years and was consistent across all geographic and operating segments. 
 
Analysts at Stifel suggest that such robust growth indicates Colgate-Palmolive's gains in market share. It is also seen as an affirmation of the company's strategic investments in advertising, research, and development, along with mergers and acquisitions, particularly within Hill’s pet nutrition segment. 
 
Stifel projects that, compared to its industry peers, Colgate-Palmolive's volume growth will feature prominently at the upper end. This could potentially lead to a modest uptick in the company’s stock multiple, currently forecast by Stifel at an earnings multiple of 17 times projected EBITDA for 2025. 
 
Despite facing challenges like fluctuations in currency exchange rates or the necessity for continued reinvestment in business operations, Stifel remains optimistic about substantial EBIT growth for Colgate-Palmolive. The firm believes that strong volume growth combined with sustained gross margin expansion positions Colgate-Palmolive favorably for future market share gains. 
 
In other recent news pertinent to investors' interests, several significant developments have occurred around Colgate-Palmolive Company. Q1 results from earlier this year showed robust net sales growth pegged at approximately six percent alongside marked improvement in gross margins by up to 310 basis points despite headwinds from foreign exchange rates. This performance is expected to set the stage for a promising year, with anticipated mid-to-high single-digit base business earnings per share growth. 
 
Several other financial institutions have also raised their price targets for Colgate-Palmolive. Deutsche Bank has increased its price target to $104 while maintaining a buy rating due to the company's projected upward risk in full-year earnings and organic sales growth forecasts. Similarly, Morgan Stanley has revised its price target upwards to $103, citing confidence in Colgate-Palmolive’s ability to sustain high operational and earnings growth. Argus followed suit by raising its own price target to $107 on account of the company's consistent organic sales growth and commitment towards product innovation. 
 
In an interesting development, Jeff Duncan, representative of South Carolina's 3rd congressional district, sold his stocks in Colgate-Palmolive from his Raymond James IRA as part of a shift towards a more diversified retirement savings plan. These recent developments highlight active interest and ongoing changes within investor sentiment about Colgate-Palmolive's market performance along with strategic positioning.