Colgate-Palmolive (CL) Stock Forecast & Price Target

Colgate-Palmolive has demonstrated strong organic sales growth, particularly in China, where growth was reported in the high-single digits, contributing to an overall organic sales growth of 4.3%. The company’s gross margin has improved, increasing by 70 basis points year-over-year to 60.3%, driven by cost-saving initiatives and strategic pricing, despite some upward pressure from raw material costs. Additionally, Colgate-Palmolive maintains a leading market share in the global toothpaste and manual toothbrush categories, at 41.4% and 32.2% respectively, indicating strong brand positioning and competitive momentum which supports a positive long-term growth outlook.

Colgate-Palmolive reported organic sales growth of 4.3% in 4Q24, which fell short of consensus expectations of approximately 6%, indicating potential challenges in the near term with sales anticipated to weaken further to around 3% in 1H25. The company's gross margin also came in below consensus, and while management expects some expansion in 2025, it is projected to be significantly less than the 240bps expansion seen in 2024, reducing their capacity for reinvestment. Additionally, pet product sales showed weakness in Europe, with organic growth at only 2.8% and volume declines affecting overall performance, alongside decelerating growth rates in both emerging and developed markets, suggesting ongoing difficulties in achieving robust revenue generation.