MStanley recommends buying Colgate-Palmolive shares
2023.01.30 10:11
MStanley recommends buying Colgate-Palmolive shares
By Tiffany Smith
Budrigannews.com – Colgate-Palmolive (NYSE:) was upgraded by Morgan Stanley analysts. to Overweight from Equal-Weight on Monday with an $82 per share price target.
The recent decline in CL’s share price provides a favorable entry point into a “solid long-term story,” according to the analysts, making the stock their top Household Products pick.
According to the analysts, “We are upgrading CL to OW, believing that a sharp recent stock pullback of nearly 10% in the last month (including -5.2% on Friday with Q4 EPS), during which CL underperformed the S&P 500 by nearly 1,800 bps is offering a buying opportunity into a structurally attractive name”
They continued, “CL has robust pricing power (+12.5% YoY at CL in Q4, above PG and KMB at 10%), sustainably strong pet trends (13% H2 two-year avg Pet organic sales even with capacity constraints), positive corporate strategy changes underway that are driving improved results, and attractive growth opportunity in emerging markets (half of sales mix), making it a solid LT story with MSD (5-6%) LT topline growth.”
Additionally, the analysts anticipate that CL’s 2023 results will exceed consensus expectations, which they believe will be impacted by CL’s overly conservative guidance.
“Clearly exacerbated post-Q4 EPS on Friday, which included a large Q4 GM miss, as well as weaker than expected FY23 EPS guidance,” they add as a reason for the stock’s decline. The analysts believe that this opens up an opportunity as a result.
Following the upgrade, CL shares are up about 1% prior to the market.
