Higher Oral Care Share Would Boost Colgate-Palmolive’s Stock

-10.29%
Downside
90.05
Market
80.78
Trefis
CL: Colgate Palmolive logo
CL
Colgate Palmolive

Trefis members have created forecasts for two key drivers of Colgate-Palmolive’s (NYSE:CL) stock over the last week: (1) Colgate’s Global Market Share of Oral Care and (2) EBITDA Margin of Colgate Oral Care. The member forecasts suggest that Colgate’s Global Market Share of Oral Care will trend higher, while EBITDA Margin of Colgate Oral Care trend slightly lower compared to the Trefis forecast. These projections suggest a combined upside of nearly 5% for CL’s stock.

Colgate Oral Care is the most valuable division for Colgate-Palmolive, constituting 44% of the $85 Trefis price estimate for Colgate’s stock. Increase in Colgate’s Global Market Share of Oral Care would likely come at the expense of players like Procter & Gamble (NYSE:PG) and Unilever (NYSE:UL).

Given the importance of the oral care business for Colgate-Palmolive, the stock is quite sensitive to (1) Colgate’s Global Market Share of Oral Care and (2) EBITDA Margin of Colgate Oral Care. Below are charts showing recent estimates created by Trefis members for the two drivers in detail.

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1. Colgate‘s Global Market Share of Oral Care

The average of forecasts for Colgate’s Global Market Share of Oral Care created by Trefis members indicated a projected increase from about 36% in 2010 to about 42% by the end of the Trefis forecast period, compared to the baseline Trefis estimate of an increase from 34% in 2010 to nearly 38% by the end of the Trefis forecast period. The member estimates imply an upside of 6% to the Trefis price estimate for Colgate-Palmolive’s stock. In the past, Colgate’s Global Market Share of Oral Care has increased from 26% in 2005 to nearly 34% in 2009.

You can drag the forecast trend-line above to express your own view, and see the sensitivity of Colgate-Palmolive’s stock to Colgate’s Global Market Share of Oral Care.

Our complete analysis for Colgate’s Global Market Share of Oral Care is here.

2. EBITDA Margin of Colgate Oral Care

The average of forecasts for EBITDA Margin of Colgate Oral Care created by Trefis members indicated a projected increase from 29.8% in 2010 to 30.4% by the end of the Trefis forecast period, compared to the baseline Trefis estimate of an increase from 30% in 2010 to 31% by the end of the Trefis forecast period. The member estimates imply a downside of 1% to the Trefis price estimate for Colgate-Palmolive’s stock. In the past, EBITDA Margin of Colgate Oral Care has increased from 24.2% in 2005 to 29.5% in 2009.

You can drag the forecast trend-line above to express your own view, and see the sensitivity of Colgate-Palmolive’s stock to EBITDA Margin of Colgate Oral Care.

Our complete analysis for Colgate-Palmolive’s stock is here.