Could Colgate Stock Rise after 1Q16 Results?
Will Colgate’s Innovation Lead to a Revenue Beat in 1Q16?
Colgate’s stock rose after 4Q15 results
Colgate-Palmolive (or Colgate) (CL) is set to announce its 1Q16 earnings during Market hours on April 28, 2016. Colgate was trading at $71.32 on April 18, 2016. The stock has risen 3.3% since January 2, 2015, and 10.2% year-to-date. The benchmark S&P 500 Index (SPY) (IVV) (VOO) has risen 1.8% since 2015. Colgate stock rose 3.9% after it released its 4Q15 results.
Stock price movement versus peers
Colgate stock has been volatile since the beginning of 2015. The stock fell almost 12.6% to $60.37 on August 25, 2015, from $69.08 on August 5, 2015. The fall was primarily due to currency headwinds and the fall in global markets, particularly in the Asia-Pacific region. However, Colgate was able to sustain some of its gains until October 2015 and is trading at its peak of $71.32 year-to-date.
Similarly, Kimberly-Clark (KMB) and Clorox (CLX) stocks have risen 18.3% and 21.8%, respectively since 2015. However, Procter & Gamble (PG) stock has fallen 8.4% since January 2015.
Gross buyback in 2016
Colgate is focusing on capital structure, given the foreign exchange impact on cash profit. Capital expenditure will be focused on supporting its global growth and efficiency program and then on share buybacks, according to CEO (chief executive officer) and president Ian Cook. According to the company’s capital structure, Colgate plans a gross buyback in 2016, which would be in the range of $1 billion–1.3 billion.
Focus on brand penetration
Colgate’s focus on innovation helps the company build a strong portfolio and increases consumer targets through brand penetration. For example, Colgate’s line of Sanex Advanced shower oils is bringing the shower oil trend from the pharmacy to the masses in Europe. The shower oil is said to minimize the risk of irritation and be suitable for children, a new consumer target.
To learn more about Colgate’s business, please read, A Must-Know Business Overview of Colgate-Palmolive .
Colgate makes up 1.3% of the PowerShares S&P 500 Quality ETF (SPHQ).
In the final part of our series, we’ll see if progressive growth could help Colgate’s 1Q16 valuation multiple.
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