We have maintained our long-term Neutral recommendation on
), a global consumer products company with a target price of
Why the Reiteration?
Colgate-Palmolive commands a 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 facilitate the company to take advantage of growth
opportunities and thus drive profitability.
This is evident from Colgate-Palmolive's results in the
recently concluded quarter. The company posted second-quarter
2013 adjusted earnings of 70 cents per share, up 4% year over
year and in line with the Zacks Consensus Estimate.
The company's adjusted gross profit margin expanded 70 basis
points (bps) to 58.6%, driven by increased prices and cost
savings initiatives. Moreover, adjusted operating profit climbed
3% to $1,032 million, while operating margin expanded 20 bps to
Looking ahead, Colgate-Palmolive anticipates the growth
momentum to continue as it remains on track with its global
restructuring program, funding-the-growth initiatives and
strategic worldwide pricing schemes. In 2013, the company which
Church & Dwight Co. Inc.
) expects strong organic sales and gross margin expansion,
coupled with 4.5%-5.5% growth in earnings per share.
However, lingering macroeconomic concerns in Venezuela will
likely remain a drag on Colgate-Palmolive's financials in the
coming quarters. In addition, intense competition and a sluggish
economic recovery may undermine the company's growth
Other Stocks to Consider
Currently, Colgate-Palmolive carries a Zacks Rank #4 (Sell).
Till any upward revision occurs in Colgate-Palmolive's Zacks
Rank, other stocks worth considering in the consumer staples
Service Corp. International
). Both the stocks carry a Zacks Rank #2 (Buy).
CHURCH & DWIGHT (CHD): Free Stock Analysis
COLGATE PALMOLI (CL): Free Stock Analysis
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SERVICE CORP IN (SCI): Free Stock Analysis
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