Do JP Morgan and Morgan Stanley Agree On Colgate-Palmolive’s Target Price?

-8.48%
Downside
88.27
Market
80.78
Trefis
CL: Colgate Palmolive logo
CL
Colgate Palmolive

Colgate Palmolive‘s (NYSE: CL), share price has seen a steady rise over this year, primarily due to the company beating market consensus in revenue and earnings for Q4 2018 and Q1 2019. But for Q2 2019, results declared recently by the company missed market consensus in revenue and earnings. Overall, on an average brokerage firms seem neutral on the stock, with an average price target of $70.7 per share. In this analysis, we look at how the top brokerage firms view Colgate-Palmolive stock, and how their price targets have changed over time.

View our interactive dashboard analysis – Colgate-Palmolive Price Target: Are JPMorgan, Morgan Stanley, and Credit Suisse bearish on Colgate-Palmolive in 2019? In addition, here is more Consumer Staples data. 

1. Top Banks are mixed in their views: Morgan Stanley expects a bearish trend, while Credit Suisse and JP Morgan are bullish

  • JPMorgan is most bullish on Colgate-Palmolive (CL) with a $78 price target while Credit Suisse is also bullish with a target of $72.
  • Morgan Stanley, meanwhile is bearish on the stock with target of $62.
  • This implies an average price target of $70.70,  just above CL’s current market price.
Relevant Articles
  1. Should You Pick Colgate-Palmolive Stock Over Monster Beverage After The Latter’s 2x Gains This Year?
  2. Should You Pick Colgate-Palmolive Stock After A Q3 Beat And 4% Gains This Month?
  3. Is Colgate-Palmolive Stock A Better Pick Over Marriott?
  4. Which Is A Better Consumer Defensive Pick – Kimberly-Clark Or CL Stock?
  5. Should You Buy Colgate-Palmolive Stock At $80?
  6. Should You Buy This Households & Personal Products Company Over Colgate-Palmolive Stock?

2. Since March 2019, all 3 have increased their price targets for CL.

  • The banks have generally increased Colgate-Palmolive’s price estimate through the year and the target price for 2 out of 3 banks compared here is above its current market price.
  • Morgan Stanley has increased its target price from $60 in January 2019 to $72 in July 2019.
  • JP Morgan has increased its target price from $51 in January 2019 to $78 in July 2019.
  • Credit Suisse has decreased its target price from $64 in January 2019 to $55 in March 2019 but raised it to $62 in July 2019.

3. The multi-year view shows banks moving largely in-sync and the consensus target moves in a similar manner. Only Credit Suisse has a lower target price than it had at the start of the year

  • The consensus target price (average of the first price target issued by each bank for that year) has moved similar to most of the banks compared in the timeline.
  • After Q1 2019 results most of them increased their target prices which were higher than their target in January 2019 except Credit Suisse.

 

 

4. Top 3 banks’ consensus target at start of year [SoY] correctly predicted the direction of end of year [EoY] stock price for 2017, but missed for 2018 and 2019 [SoY = Start of the Year ; EoY = End of the Year]

  • The average target price of all 3 banks correctly predicted the direction of Colgate-Palmolive’s stock price in 2017.
  • But in 2018 the average consensus failed to predict the direction as Colgate-Palmolive’s share price fell.

 

5. The top 3 banks’ consensus prediction wasn’t always accurate, they also didn’t sync with Colgate-Palmolive’s reported Revenues and Profits which were nearly flat.

  • Average Target price at the beginning of the year has fluctuated a lot over the last 3 years.
  • The banks have failed to be in sync with the Colgate-Palmolive’s Revenue and Earnings over the years.

6. CL’s key fundamental multiples (price/sales and price/earnings) have moved in tandem with the S&P 500 Index in 2017 and 2018. However, for 2019, expected P/S and P/E are unlikely to move in line with the index

  • P/S has increased from 4.2 in 2017 to 4.8 in 2018, while P/E has increased from 22.5 in 2017 to 25 in 2018.
  • FY 2019’s revenue and earnings are expected to remain nearly flat and P/S and P/E expected to fall slightly to 4.7 and 24.6 respectively, as on an average brokerage firms seem to have a moderate outlook for Colgate-Palmolive, with an average price target of $70.70 per share.

 

Conclusion:

  • The top banks may not have accurately predicted Colgate-Palmolive’s stock price over recent years, though they have largely been correct in terms of direction in 2017. The stock price saw some sharp movements in 2018 and 2019.
  • Overall, with top banks increasing their target price for Colgate-Palmolive post its Q1 2019 earnings release, it might bode well for the company’s stock and fundamentals.

 

What’s behind Trefis? See How It’s Powering New Collaboration and What-Ifs

For CFOs and Finance Teams | Product, R&D, and Marketing Teams

More Trefis Research

Like our charts? Explore example interactive dashboards and create your own.