CL - Embedded Expectations Analysis - 2021 03 03
Colgate-Palmolive Company (CL:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) earnings, with a 22.8x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management may be concerned about the top-line growth, inventory management, and the sustainability of Personal and Home care product demandSpecifically, management may lack confidence in their ability to expand premium toothpaste segment market share in Brazil, sustain gross profit margin growth, and manage logistics costs. Moreover, they may be concerned about the sustainability of e-commerce revenue growth, category inventory level management, and sales declines in their brick-and-mortar channels. Furthermore, they may lack confidence in their ability to deliver operating margin growth through revenue expansion, focus on specific brand categories with higher growth potential, and drive top-line organic growth. In addition, management may have concerns about the sustainability of Personal and Home Care product demand and they may be exaggerating the potential and innovativeness of their Prescription Diet business
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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