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Colgate (CL) Q4 Earnings: Is the Stock Likely to Disappoint?
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Consumer goods behemoth, Colgate-Palmolive Co. (CL - Free Report) is slated to report fourth-quarter 2016 results on Jan 27. Last quarter, the company’s earnings came in line with the Zacks Consensus Estimate. Over the trailing four quarters, the company beat estimates by an average of 0.7%. Let’s see how things are shaping up for this announcement.
Colgate, which has either beaten or matched earnings estimates in the past four quarters, has been gaining strength from its international brand recognition and innovative strategies. However, foreign exchange continues to be a major headwind for Colgate, with around 75% of the company’s business generated outside the U.S. Evidently, foreign currency exchange rates hurt the company’s revenue growth by 2.5% in the third quarter and is expected to negatively impact full-year 2016 sales as well. Also, Colgate remains prone to other global economic challenges in various countries. These hurdles have also caused the company’s shares to decline 9.2% over the past six months, underperforming the Zacks Categorized Soap and Cleaning Preparations industry’s drop of 5% over the same time frame.
Nonetheless, the company’s continued focus on product innovation, along with globally recognized brands and presence in both developed and emerging economies should help it capture growth opportunities and boost profitability. So, let’s wait and see if Colgate can counter the hurdles and continue with its beat-or-meet trend in the quarter to be reported.
Earnings Whispers
Our proven model does not conclusively show that Colgate is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here, as you will see below:
Zacks ESP: Colgate currently has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 75 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Colgate carries a Zacks Rank #4 (Sell). As it is, we caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks that Warrant a Look
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Michael Kors Holdings Limited , scheduled to report earnings on Feb 7, has an Earnings ESP of +2.45% and a Zacks Rank #2.
Yum! Brands, Inc. (YUM - Free Report) , scheduled to report earnings on Feb 8, has an Earnings ESP of +2.82% and a Zacks Rank #3.
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Today, you are invited to download the full list of 220 Zacks Rank #1 ""Strong Buy"" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 ""Strong Sells"" and other private research. See these stocks free >>
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Colgate (CL) Q4 Earnings: Is the Stock Likely to Disappoint?
Consumer goods behemoth, Colgate-Palmolive Co. (CL - Free Report) is slated to report fourth-quarter 2016 results on Jan 27. Last quarter, the company’s earnings came in line with the Zacks Consensus Estimate. Over the trailing four quarters, the company beat estimates by an average of 0.7%. Let’s see how things are shaping up for this announcement.
Colgate-Palmolive Co. Price and EPS Surprise
Colgate-Palmolive Co. Price and EPS Surprise | Colgate-Palmolive Co. Quote
Factors Influencing This Quarter
Colgate, which has either beaten or matched earnings estimates in the past four quarters, has been gaining strength from its international brand recognition and innovative strategies. However, foreign exchange continues to be a major headwind for Colgate, with around 75% of the company’s business generated outside the U.S. Evidently, foreign currency exchange rates hurt the company’s revenue growth by 2.5% in the third quarter and is expected to negatively impact full-year 2016 sales as well. Also, Colgate remains prone to other global economic challenges in various countries. These hurdles have also caused the company’s shares to decline 9.2% over the past six months, underperforming the Zacks Categorized Soap and Cleaning Preparations industry’s drop of 5% over the same time frame.
Nonetheless, the company’s continued focus on product innovation, along with globally recognized brands and presence in both developed and emerging economies should help it capture growth opportunities and boost profitability. So, let’s wait and see if Colgate can counter the hurdles and continue with its beat-or-meet trend in the quarter to be reported.
Earnings Whispers
Our proven model does not conclusively show that Colgate is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here, as you will see below:
Zacks ESP: Colgate currently has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 75 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Colgate carries a Zacks Rank #4 (Sell). As it is, we caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks that Warrant a Look
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Tractor Supply Company (TSCO - Free Report) , slated to report earnings on Feb 1, has an Earnings ESP of +1.09% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Michael Kors Holdings Limited , scheduled to report earnings on Feb 7, has an Earnings ESP of +2.45% and a Zacks Rank #2.
Yum! Brands, Inc. (YUM - Free Report) , scheduled to report earnings on Feb 8, has an Earnings ESP of +2.82% and a Zacks Rank #3.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 ""Strong Buy"" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 ""Strong Sells"" and other private research. See these stocks free >>