Colgate Soars to a New High - Analyst Blog
The shares of Colgate-Palmolive Co. (CL)
reached a new 52-week high of $118.97 on Tuesday, Apr 2, gaining
momentum from the company’s consistent performance as well as an
encouraging outlook. This global consumer products company
eventually closed at $118.90, recording a healthy year-to-date
return of 11.8%. Average volume of shares traded over the last 3
months stands at approximately 1,735K.
Apart from Colgate, other stocks in the retail space that touched
all-time highs on the same trading day are Constellation
Brands Inc. (STZ), Avis Budget Group Inc.
(CAR) and Archer Daniels Midland Company (ADM)
reaching $49.22, $29.53 and $34.28, respectively.
An impressive earnings performance, favorable fiscal 2013 outlook,
expanding profit margins, healthy financial position and a decent
dividend yield are the key strengths of the stock that enabled it
to attain a new high. Moreover, the stock currently trades at a
forward P/E of 20.8x, a slight premium from the peer group average
of 20.6x.
With respect to earnings surprises, Colgate has either met or
surpassed the Zacks Consensus Estimate over the last several
quarters, most recently topping it by 0.71% in the fourth quarter
of fiscal 2012.
On Jan 31, Colgate posted impressive quarterly results with healthy
earnings and sales comparisons for the fourth quarter of fiscal
2012. The company posted adjusted earnings of $1.41 per share that
came a penny ahead of the Zacks Consensus Estimate and jumped 8.5%
year over year.
Global sales of $4,286 million increased 2.7% from the prior-year
quarter level of $4,172 million, primarily benefiting from a 2.5%
upside in pricing and 1.5% increase in global unit volumes
(excluding divested businesses), partially offset by a negative
impact of 1.5% from foreign exchange.
The company’s adjusted gross profit margin expanded 90 basis points
(bps) to 58.6%, driven by increased prices as well as cost savings
from the company’s funding-the-growth initiatives.
Looking ahead, Colgate-Palmolive anticipates its growth momentum to
continue in fiscal 2013 with gross margin expansion and
double-digit growth in earnings per share. However, lingering
macroeconomic concerns in Venezuela will remain a drag on this
Zacks Rank #4 (Sell) stock’s financials in the coming quarters.
Colgate is also known for its shareholder friendly moves. The
company has been regularly increasing its dividend every year since
2001and presently is paying an annual cash dividend of $2.48. This
currently yields a solid 2.1%, while the company has a payout ratio
of 47%.
ARCHER DANIELS (ADM): Free Stock Analysis Report
AVIS BUDGET GRP (CAR): Free Stock Analysis Report
COLGATE PALMOLI (CL): Free Stock Analysis Report
CONSTELLATN BRD (STZ): Free Stock Analysis Report
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