Colgate-Palmolive Company
CL
$85.14
-0.32%
Colgate-Palmolive is a global leader in the Household & Personal Products industry. It is defined by its dominant oral care brands and extensive international footprint, with a core narrative of providing essential consumer goods across over 200 countries.
CL
Colgate-Palmolive Company
$85.14
Investment Opinion: Should I buy CL Today?
Based on a synthesis of the data, the objective assessment for Colgate-Palmolive (CL) is a Hold. The company's foundational strengths in essential goods, strong margins, and analyst support are compelling for long-term portfolios. However, the current premium valuation, high debt load, and recent earnings volatility suggest the stock is fairly valued at present, with limited near-term catalysts for significant outperformance. Investors may find better entry points during market pullbacks.
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CL 12-Month Price Forecast
The analysis indicates a neutral stance due to countervailing forces: exceptional operational strength and brand power are balanced by rich valuation and financial leverage. The recent sharp correction has improved the risk/reward profile, but the stock likely requires a period of consolidation or earnings growth to justify a higher price.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Colgate-Palmolive Company's 12-month outlook, with a consensus price target around $110.68 and implied upside of +30.0% versus the current price.
Average Target
$110.68
5 analysts
Implied Upside
+30.0%
vs. current price
Analyst Count
5
covering this stock
Price Range
$68 - $111
Analyst target range
Wall Street analyst coverage is active, with recent actions including upgrades and reiterations. For instance, Deutsche Bank upgraded the stock from Hold to Buy on March 30, 2026. Other major firms like Citigroup, JP Morgan, and B of A Securities maintain Buy or Overweight ratings, while Barclays and Wells Fargo hold Equal Weight stances. Specific consensus target price data is not available in the provided inputs.
Bulls vs Bears: CL Investment Factors
Colgate-Palmolive presents a classic case of a high-quality, defensive company facing near-term valuation and profitability headwinds. Its strong brands, global footprint, and cash generation are offset by high leverage and a premium price. The stock is in a consolidation phase after a sharp rally and correction.
Bullish
- Strong Brand & Global Presence: Dominant oral care leader with 70% international sales, providing stable demand.
- Robust Profitability Metrics: High gross margin (60.1%) and ROE (39.5%) indicate operational excellence.
- Healthy Cash Flow Generation: Strong TTM free cash flow of $3.63B supports dividends and investments.
- Analyst Upgrades & Support: Recent upgrades to Buy (e.g., Deutsche Bank) reflect positive sentiment.
Bearish
- High Financial Leverage: Elevated debt-to-equity ratio of 147.9 increases financial risk.
- Premium Valuation: Trailing P/E of 30 is high, suggesting limited near-term upside.
- Recent Profitability Pressure: Q4 2025 net loss of $37M contrasts with prior profitable quarters.
- Significant Recent Pullback: Stock down 14% from recent high, indicating weakening momentum.
CL Technical Analysis
The stock has exhibited significant volatility over the observed 180-day period, with a clear uptrend from October 2025 lows near $75 to a peak of $99.14 in late February 2026, followed by a sharp correction. Over the short term, the stock is down 14.03% over the past month but remains up 7.86% over the past three months, indicating recent profit-taking after a strong rally. The current price of $85.23 sits near the middle of its 52-week range of $74.55 to $99.33, representing a pullback of approximately 14% from its recent high.
Beta
0.26
0.26x market volatility
Max Drawdown
-23.1%
Largest decline past year
52-Week Range
$75-$99
Price range past year
Annual Return
-9.0%
Cumulative gain past year
| Period | CL Return | S&P 500 |
|---|---|---|
| 1m | -10.9% | -3.6% |
| 3m | +9.6% | -4.0% |
| 6m | +9.2% | -2.0% |
| 1y | -9.0% | +16.2% |
| ytd | +9.6% | -3.8% |
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CL Fundamental Analysis
Revenue for Q4 2025 was $5.23 billion, representing a 5.78% year-over-year growth from the prior-year quarter. However, profitability was impacted in Q4, with a net loss of $37 million, contrasting with positive net income in the preceding three quarters of 2025. The company maintains a high debt-to-equity ratio of 147.93, indicating significant financial leverage, but it generates robust cash flow, with trailing twelve-month free cash flow of $3.63 billion. Operational efficiency remains strong, as evidenced by a high return on equity of 39.48% and a healthy gross margin of 60.11% for the latest quarter.
Quarterly Revenue
$5.2B
2025-12
Revenue YoY Growth
+0.05%
YoY Comparison
Gross Margin
+0.60%
Latest Quarter
Free Cash Flow
$3.6B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is CL Overvalued?
Given the company's positive net income on a trailing basis, the trailing P/E ratio of 29.97 is the primary valuation metric. This suggests the stock is trading at a premium multiple relative to its earnings. The forward P/E of 20.61, based on analyst estimates, indicates expectations for earnings growth. Peer comparison data is not available in the provided inputs.
PE
30.0x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range -430x~3280x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
17.8x
Enterprise Value Multiple
Investment Risk Disclosure
The primary financial risk is the company's high debt-to-equity ratio of nearly 148%, which could constrain financial flexibility and amplify losses in a downturn, especially if interest rates remain elevated. Market and operational risks include recent quarterly volatility, exemplified by the Q4 2025 net loss, which may signal margin pressure from inflation or competitive dynamics. Furthermore, the stock's premium trailing P/E of 30 makes it vulnerable to multiple compression if growth expectations are not met, a risk highlighted by its significant underperformance relative to the S&P 500 over the past year. External risks involve exposure to emerging markets (nearly half of international sales), which are subject to currency volatility and geopolitical instability.
FAQ
Key risks include high financial leverage (debt-to-equity of 147.9%), which amplifies risk in a downturn. Recent quarterly volatility, including a Q4 2025 net loss, poses an earnings risk. Valuation risk is present with a premium P/E, and the stock has significantly underperformed the S&P 500 over the past year (-25% relative strength), indicating weak momentum.
The 12-month outlook is for range-bound trading with a base case target of $82-$92, representing modest upside from $85.23. The bull case ($99) requires a return to peak valuation and strong earnings, while the bear case ($74) aligns with the 52-week low if risks materialize. Analyst forward EPS estimates average $4.92, implying growth from recent quarters.
CL appears slightly overvalued based on trailing earnings (P/E of 29.97) but closer to fair value based on forward estimates (P/E of 20.61). The high multiple reflects its quality and stability. The recent pullback has improved valuation, but it still trades at a premium compared to many consumer staples, supported by its high ROE of 39.5% and strong margins.
CL is a high-quality defensive stock but may not be an optimal buy at current levels. Its trailing P/E of 30 is historically rich, and the stock has just corrected 14% from its peak, suggesting it may be fairly valued. It could be a good buy for dividend-focused, long-term investors on further dips, but growth-oriented investors may find better opportunities elsewhere.
CL is predominantly suitable for long-term investment. Its stable business model, global brand, and 2.85% dividend yield are aligned with a buy-and-hold, income-generating strategy. Short-term trading is challenged by the stock's low beta (0.26) and recent high volatility, making directional bets less predictable.