CL - Embedded Expectations Analysis - 2019 06 17
Colgate-Palmolive Company (CL:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) Earnings, with a 25.5x Uniform P/E, implying bullish expectations for the firm. However, management has concerns about their organic sales growth, their portfolio of products, and pricing and margins.Specifically, they may lack confidence in their ability to drive market penetration in India, manage their gross margins, and sustain growth in organic sales, PCA, and Elta. Moreover, they may be concerned about pricing downsizing in the US, portfolio rebalancing efforts, and their ability to effectively advertise in Latin America. Also, they may lack confidence in the sustainability of Colgate Total consumption and their ability to drive increases in its sales velocity. Finally, management may be concerned about the impact of FX on European sales and their Asian turnaround strategy, and may be exaggerating the global penetration of their big brands and the incremental sales growth in their farm and feed channel.
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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