The Colgate-Palmolive stock price remains in a deep correction as investors wait for the fourth-quarter results. CL has plunged by over 17%, bringing its market cap to about $73 billion. So, is Colgate a good stock to buy the dip in?
Colgate-Palmolive is a good value company
Colgate-Palmolive is a leading company in the consumer staples industry. The firm operates its business in two key segments: oral, personal, and home care, and pet nutrition. It is one of the biggest players in the industry, owning brands like Colgate, Sorriso, Tom’s of Maine, and Sanex.
Colgate-Palmolive’s business has done well in the past few years as its annual revenue rose from $15.7 billion in 2019 to over $20 billion in the trailing twelve months (TTM). The net income has moved from $2.16 billion in 2021 to over $2.86 billion.
The next key catalyst for the Colgate-Palmolive stock will be its upcoming financial results, which will come out on Friday. Analysts anticipate that the company’s revenue will come in at $5 billion, a 0.78% increase from the same period a year ago.
Colgate-Palmolive’s annual revenue will come in at $20.15 billion, a 3.52% annual increase. Its 2025 revenue guidance will be $20.39 billion, a 1.27% annual increase.
These numbers mean that Colgate’s growth has largely stalled and is underperforming other companies. As such, it has become highly overvalued, with a forward P/E ratio of 25.45, up from the sector median of 18.5. The trailing-twelve-month P/E ratio of 25.8 is also higher than the sector median of 21.
Still, analysts are optimistic that its stock wil rebound in the future. The Colgate stock forecast is $100, up from the current $89.57. The most notable bullish analysts are RBC Capital, Stifel, and UBS.
Read more: Colgate-Palmolive (CL): dividend king stock gets overbought
Colgate-Palmolive stock price analysis
CL stock price chart by TradingView
The weekly chart shows that the CL share price peaked at $108.25 in 2024 and has now dropped to $85.80, its lowest point in April last year.
It has stalled at the 38.2% Fibonacci Retracement point. It has moved between the 50-week and 100-week moving averages. It is hovering at the strong pivot reverse point of the Murrey Math Lines tool.
Therefore, the Colgate-Palmolive stock price will likely drop after earnings. If this happens, the next point to watch will be the 50% retracement level at $78.20 or 12% below the current level. This is an important level since it was also the highest point in 2020, 2021, 2022, and 2023. This view will be confirmed if drops below the support at $85.80.
On the flip side, a move above the 23.60% retracement point at $94.40 will invalidate the bearish view.
The post Colgate-Palmolive stock analysis: overvalued ahead of earnings appeared first on Invezz
