Why Colgate-Palmolive Company (CL) Shares Are Popping Today
Colgate-Palmolive Company (NYSE:CL) shares soared Monday on the news that several analysts had issued an upgrade on the company.
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The toothpaste maker was upgraded at Morgan Stanley to kick off the week. The analysts at the company said that valuation and projections of re-acceleration in sales growth were the reasons behind the upgrade.
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Analyst Dara Mohsenian also increased his rating in Colgate-Palmolive Company from “equal weight” to “overweight,” while CL’s price target was raised from a previous rating of $75 to a new one of $84 now.
The company had recently scored the lowest mark in a recent survey of investors on sentiment among mega-cap consumer staples companies due to disappointing sales growth in three straight quarter, while earnings were below the mark for these periods.
Nevertheless, Mohsenian believes that Colgate-Palmolive Company’s revenue growth is slated to surge due to easier comparisons and a rebound in emerging markets. Additionally, he believes the market is “mispricing” the company’s strategic options and competitive positions.
“We see a rare opportunity to buy a well-positioned business at a valuation level close to structurally less-attractive peers, as [Colgate-Palmolive’s] topline slowdown vs. peers has driven stock underperformance,” Mohsenian wrote in a note to clients.
CL shares surged about 3.3% Monday. Over the last three months, the stock has dropped about 3.1%, but it has performed well overall in the current calendar year, popping 12.5%.
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