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Colgate (CL) to Post Q3 Earnings: What Awaits the Stock?

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Colgate-Palmolive Company (CL - Free Report) is likely to register top-line growth when it reports third-quarter 2021 numbers on Oct 29, before the opening bell. The Zacks Consensus Estimate for revenues is pegged at $4,410 million, which indicates a rise of 6.2% from the prior-year quarter’s reported figure.

The company’s bottom line is expected to be in line with the prior quarter’s figure. The Zacks Consensus Estimate for earnings is currently pegged at 79 cents per share. The consensus mark went down a penny in the past 30 days. The company’s earnings have matched estimates in the trailing three quarter.

Key Aspects to Note

This leading global consumer products company is likely to keep gaining from consumers’ demand for personal care, hygiene and home care products. To continue boosting revenue opportunities, Colgate is engaging in well-chalked innovations as well as expansion into new markets and channels. It has been focusing on boosting the online availability of products, given consumers’ growing adherence toward digital shopping. Such upsides are expected to have contributed to the company’s top line during the third quarter.

Speaking of the company’s innovation strategy, it is focused on growing in adjacent categories and product segments. The company has been undertaking major innovations for the premiumization of its Oral Care portfolio. Its innovation efforts are highlighted by the continued expansion of the Naturals and Therapeutics divisions as well as the Hello Products LLC buyout. The company partnered with Philips to introduce electric toothbrushes in Latin America, where the usage of electric toothbrushes is low.

Expanding the availability of products, through enhanced distribution to newer markets and channels, is one of Colgate’s priorities to improve organic sales. The company is aggressively expanding into faster growth channels, while extending the geographic footprint of its brands. The company has also been gaining from growth in professional skincare businesses — Elta MD and PCA Skin — in spas and dermatologists. It has expanded its premium skincare portfolio with the buyout of Filorga skincare business. The company’s pet nutrition products have also been doing well.

However, concerns stemming from rising raw material costs, logistics expenses and advertising costs cannot be ignored. In its last earnings call, management informed that it expects raw-material prices to remain elevated throughout 2021. In terms of logistics, industrywide headwinds related to trucking, warehousing and ocean freight are likely to have been a drag.

ColgatePalmolive Company Price, Consensus and EPS Surprise

 

ColgatePalmolive Company Price, Consensus and EPS Surprise

ColgatePalmolive Company price-consensus-eps-surprise-chart | ColgatePalmolive Company Quote

 

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Colgate this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Colgate has a Zacks Rank #4 (Sell) and an Earnings ESP of +0.42%.

Stocks With Favorable Combination

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:

Inter Parfums, Inc. (IPAR - Free Report) currently has an Earnings ESP of +5.00% and carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Corteva, Inc. (CTVA - Free Report) ) currently has an Earnings ESP of +7.89% and a Zacks Rank #3.

Tyson Foods, Inc. (TSN - Free Report) currently has an Earnings ESP of +19.13% and a Zacks Rank #3.