CL - Embedded Expectations Analysis - 2018 10 03
Colgate-Palmolive Company (CL:USA) currently trades below recent averages relative to UAFRS-based (Uniform) Earnings, with a 22.0x Uniform P/E. However, even at these levels, the market has somewhat bullish expectations for the firm, while management is concerned about rising Brent Crude prices, their toothpaste segment, and destocking in MexicoSpecifically, management may be concerned about the impact that the rising price of Brent is having on their margins, and about the destocking of their products in Mexico. Additionally, they may be exaggerating their optimism that the combination of raw material inflation and recent weakness in Latin American currencies versus the dollar should lead to a more favorable pricing environment. Moreover, they may lack confidence in their ability to negotiate mutually beneficial promotional activities with retailers, and to reevaluate their commerce innovation. Lastly, they may lack confidence in their ability to maintain their leadership position in the toothpaste segment
Colgate-Palmolive manufactures and markets a variety of products in the United States and around the world. The company has two product segments: Oral, Personal and Home Care; and Pet Nutrition. Oral, Personal and Home Care products include toothpaste, toothbrushes and mouthwash, bar and liquid hand soaps, shower gels, shampoos, conditioners, deodorants and antiperspirants, skin care products, dishwashing detergents, fabric conditioners, household cleaners, and other similar items. Pet Nutrition products include specialty pet nutrition products manufactured and marketed by Hill's Pet Nutrition.
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