We have maintained our long-term Neutral recommendation on the
global consumer products company,
) with a target price of $115.00 following its fourth-quarter
2012 results. Moreover, shares of Colgate-Palmolive retain a
Zacks Rank #3 (Hold).
Why the Reiteration?
Colgate-Palmolive commands a market-leading position in oral
care and personal care product categories. We believe
management's continued focus on product innovation, globally
recognized brands and broad international presence in both
developed and emerging markets facilitates the company to take
advantage of growth opportunities and thereby augment
The company posted fourth-quarter 2012 adjusted earnings of
$1.41 per share that came a penny ahead of the Zacks Consensus
Estimate and jumped 8.5% year over year.
The company's adjusted gross profit margin expanded 90 basis
points (bps) to 58.6%, driven by increased prices as well as cost
savings from the company's funding-the-growth initiatives.
Moreover, adjusted operating profit climbed 6% to $1,035 million,
while operating margin expanded 80 bps to 24.1%.
Looking ahead, Colgate-Palmolive anticipates that growth
momentum will continue in fiscal 2013 with gross margin expansion
and double-digit growth in earnings per share. However, lingering
macroeconomic concerns in Venezuela will remain a drag on its
financials in the coming quarters.
In addition, intense competition and sluggish economic
recovery may undermine the company's growth prospects.
Other Stocks to Consider
Until any further upward revision in Colgate-Palmolive's Zacks
Rank, other stocks in the consumer products industry that are
worth considering include
Proctor & Gamble Company
Church & Dwight Company Inc
The Clorox Company
), all having a favorable Zacks Rank #2 (Buy).
CHURCH & DWIGHT (CHD): Free Stock Analysis
COLGATE PALMOLI (CL): Free Stock Analysis
CLOROX CO (CLX): Free Stock Analysis Report
PROCTER & GAMBL (PG): Free Stock Analysis
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