Colgate Palmolive’s Stock A Safe Bet During Coronavirus Crisis?

This week, the stock markets saw their biggest sell off since the 2008 crisis. There were two distinct trends driving the sell-off. Firstly, the increasing number of Coronavirus cases outside China is causing mounting concerns of a global economic slowdown. Secondly, crude oil prices plummeted by more than 20% after Saudi Arabia increased production.
Colgate Palmolive (NYSE: CL) stock has fallen almost 12% this week, and is down by a total of over 13% since early February, considering the fact that consumer product sales are not expected to take a major hit, and sanitary and health care products could, in fact, see a surge in sales.
Also, going by the trends seen during the 2008 economic slowdown, it’s likely that CL stock could drop further if the S&P slides, but relatively less, and will also recover at a rate slower than the S&P.

In our interactive dashboard analysis, 2007-08 vs. 2020 Crisis Comparison: How Did Colgate Palmolive Stock Fare Compared with S&P 500?, we take a look at how the company’s stock reacted to the economic crisis of 2008 and compare its performance with the S&P 500.

Colgate Stock vs. S&P 500 Over 2020 Coronavirus/Oil Price War Crisis

• Colgate stock has declined by almost 12% this week and the stock is down by around 13% since February 1, after the WHO declared a global health emergency.
• The S&P 500 has declined by 16.5% so far this week and has fallen by 25.4% since February 1, after the global health emergency was declared by the WHO.

To see how Procter & Gamble, a close competitor, performed over the same period, view our interactive dashboard: 2007-08 vs. 2020 Crisis Comparison: How Did Procter & Gamble Stock Fare Compared with S&P 500?

Colgate Stock vs S&P 500 Over 2007-08 Financial Crisis

• Colgate stock declined from levels of around $27 in October 2007 (the pre-crisis peak) to levels of around $23 in March 2009 (as the markets bottomed out) and recovered to levels of about $32 in early 2010.
• Through the crisis, Colgate stock declined by as much as 13% from its approximate pre-crisis peak. This marked a slower decline than the S&P which fell by as much as 51%.
• However, the stock also recovered relatively slowly, rising by 39% between March 2009 and January 2010. In comparison, the S&P rose by about 48% over the same period.

See all Trefis Price Estimates and Download Trefis Data here

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