Colgate-Palmolive (CL) Stock Forecast & Price Target

Colgate-Palmolive has demonstrated strong organic sales growth, particularly in China, with a reported overall organic sales increase of 4.3% driven by a combination of volume growth and pricing strategies. The company has captured 41.4% of the global toothpaste market and 32.2% of manual toothbrushes, reflecting its ability to gain market share. Additionally, management's focus on cost-saving initiatives is evident in the improved gross margin, which increased 70 basis points year-over-year, underscoring the potential for continued sales growth aligned with long-term targets.

Colgate-Palmolive's recent financial results indicate a troubling trend, as its organic sales growth of 4.3% in the fourth quarter of 2024 fell short of the consensus estimate of approximately 6%, suggesting further weakening anticipated in early 2025. Additionally, the company's gross margin was below expectations, and although management forecasts some expansion in 2025, it is expected to be significantly lower than the 240 basis points achieved in 2024, thus limiting reinvestment flexibility amid an increasing advertising budget. Furthermore, pet product sales weakened with organic growth at just 2.8%, compounded by challenges in both emerging and developed markets, which experienced deceleration in sales growth of 150 basis points and 270 basis points, respectively.