We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Will High Demand & Online Strength Continue to Aid Colgate (CL)?
Read MoreHide Full Article
Colgate-Palmolive Company (CL - Free Report) appears to be in a good shape amid the otherwise jeopardized economy, which is impacted by the coronavirus outbreak. The company’s shares have rallied 23.1% in a year’s time, outperforming the industry’s growth of 14.9%. Markedly, this global leader of consumer products has been benefiting from rising demand for essentials amid the pandemic.
Apart from this, the company’s increased focus on online services along with brand enhancement endeavors through innovation and expansion in newer markets has been bolstering growth. Let’s delve deeper into the factors aiding this Zacks Rank #3 (Hold) stock.
Factors Narrating Colgate’s Growth Story
Colgate has been benefiting from continued demand for personal and home care products as well as the finest innovation across product categories. Notably, the company reported impressive third-quarter 2020 results with double-digit growth in operating profit, net income and earnings per share. Also, it marked the eighth consecutive quarter of sequential improvement in organic sales with growth across all of its regions.
Further, the company is witnessing positive trends in the e-commerce platform, led by growth in the Hill’s business. Encouragingly, it remains on track to expand the availability of its products through the e-commerce channel. In sync with this, the launch of Hill’s to Home program enables pet parents to purchase prescription diet products directly from their veterinarian with home delivery options. Also, its professional skincare businesses — Elta MD and PCA Skin — for spas and dermatology is performing well. As a result, the company expanded its premium skincare portfolio with the buyout of the Filorga skincare business.
The company is also focused on its innovation strategy to attain growth in adjacent categories and product segments. It is on track with the premiumization of its Oral Care portfolio through major innovation. Some notable innovation efforts include hum by Colgate, Colgate Optic White Renewal toothpaste and the Colgate Optic White Overnight Teeth Whitening Pen as well as the continued expansion of the Naturals and Therapeutics divisions. Apart from these, management’s recent buyout of Hello Products LLC (a leading oral care brand in the United States that produces eco-friendly and organic products), in a bid to expand its already strong oral care portfolio, is performing well. These endeavors are likely to aid the top line in the near term.
Hurdles on the Way
However, things are not all rosy for Colgate. The company has been witnessing elevated SG&A expenses due to higher advertising investment and logistics costs related to the increased demand stemming from the pandemic. Topping it, unfavorable foreign currency movements weighed on its third-quarter sales.
Wrapping Up
The abovementioned upsides, especially strong demand, are likely to help Colgate counter the cost-related headwinds.
Moreover, a VGM Score of B and a long-term earnings growth rate of 6.1% raise optimism in the stock. Also, the Zacks Consensus Estimate for 2021 earnings is pegged at $3.05 per share, rising 1% in the past 60 days.
Procter & Gamble (PG - Free Report) currently has an expected long-term earnings growth rate of 7.6% and a Zacks Rank #2 (Buy).
Sysco Corporation (SYY - Free Report) has a long-term earnings growth rate of 11% and a Zacks Rank #2.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Image: Bigstock
Will High Demand & Online Strength Continue to Aid Colgate (CL)?
Colgate-Palmolive Company (CL - Free Report) appears to be in a good shape amid the otherwise jeopardized economy, which is impacted by the coronavirus outbreak. The company’s shares have rallied 23.1% in a year’s time, outperforming the industry’s growth of 14.9%. Markedly, this global leader of consumer products has been benefiting from rising demand for essentials amid the pandemic.
Apart from this, the company’s increased focus on online services along with brand enhancement endeavors through innovation and expansion in newer markets has been bolstering growth. Let’s delve deeper into the factors aiding this Zacks Rank #3 (Hold) stock.
Factors Narrating Colgate’s Growth Story
Colgate has been benefiting from continued demand for personal and home care products as well as the finest innovation across product categories. Notably, the company reported impressive third-quarter 2020 results with double-digit growth in operating profit, net income and earnings per share. Also, it marked the eighth consecutive quarter of sequential improvement in organic sales with growth across all of its regions.
Further, the company is witnessing positive trends in the e-commerce platform, led by growth in the Hill’s business. Encouragingly, it remains on track to expand the availability of its products through the e-commerce channel. In sync with this, the launch of Hill’s to Home program enables pet parents to purchase prescription diet products directly from their veterinarian with home delivery options. Also, its professional skincare businesses — Elta MD and PCA Skin — for spas and dermatology is performing well. As a result, the company expanded its premium skincare portfolio with the buyout of the Filorga skincare business.
The company is also focused on its innovation strategy to attain growth in adjacent categories and product segments. It is on track with the premiumization of its Oral Care portfolio through major innovation. Some notable innovation efforts include hum by Colgate, Colgate Optic White Renewal toothpaste and the Colgate Optic White Overnight Teeth Whitening Pen as well as the continued expansion of the Naturals and Therapeutics divisions. Apart from these, management’s recent buyout of Hello Products LLC (a leading oral care brand in the United States that produces eco-friendly and organic products), in a bid to expand its already strong oral care portfolio, is performing well. These endeavors are likely to aid the top line in the near term.
Hurdles on the Way
However, things are not all rosy for Colgate. The company has been witnessing elevated SG&A expenses due to higher advertising investment and logistics costs related to the increased demand stemming from the pandemic. Topping it, unfavorable foreign currency movements weighed on its third-quarter sales.
Wrapping Up
The abovementioned upsides, especially strong demand, are likely to help Colgate counter the cost-related headwinds.
Moreover, a VGM Score of B and a long-term earnings growth rate of 6.1% raise optimism in the stock. Also, the Zacks Consensus Estimate for 2021 earnings is pegged at $3.05 per share, rising 1% in the past 60 days.
3 Stocks to Watch
Helen of Troy Limited (HELE - Free Report) currently has an expected long-term earnings growth rate of 9.4% and a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Procter & Gamble (PG - Free Report) currently has an expected long-term earnings growth rate of 7.6% and a Zacks Rank #2 (Buy).
Sysco Corporation (SYY - Free Report) has a long-term earnings growth rate of 11% and a Zacks Rank #2.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>