Colgate (CL, $61.84) Lowers Full Year Earnings Guidance, Weighed Down by Raw Material Costs and Currency Headwinds
Colgate-Palmolive reported earnings per share of 74 cents for the fourth quarter, managing to edge past analysts’ expectation of 73 cents. However, the toothpaste maker experienced a -3% year-over-year decline in adjusted net income to $638 million. The company also lowered its projection for the full year profit, citing pressures from increasing raw material costs and dollar appreciation.
Apparently compelled by higher transportation/commodity costs to hike product prices in Brazil and Argentina, Colgate suffered lower demand from these regions. Keen on boosting advertising in fiscal 2019, the company still portends challenges from currency exchange rate uncertainties and higher raw material costs – headwinds that the firm expects would drag down earnings per share by a mid-single-digit for the year. This revelation is all the more a (negative) surprise due to analysts’ prior estimate of a 2.4 percent increase in earnings per share for the year (based on IBES data from Refinitiv).
Colgate reported net sales of $3.81 billion for the fourth quarter, which is -2.1% lower from the year-ago period. But it still beat estimates of $3.77 billion, (according to Refinitiv's IBES).
The company, which accounts 42% of the global toothpaste market, expects its net sales growth for 2019 to be flat to up low-single digits, compared with analysts’ estimate of a 0.1% decline.
CL in downward trend: price dove below 50-day moving average on May 24, 2023
CL moved below its 50-day moving average on May 24, 2023 date and that indicates a change from an upward trend to a downward trend. In of 44 similar past instances, the stock price decreased further within the following month. The odds of a continued downward trend are .
Technical Analysis (Indicators)
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on May 16, 2023. You may want to consider selling the stock, shorting the stock, or exploring put options on CL as a result. In of 81 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
The Moving Average Convergence Divergence Histogram (MACD) for CL turned negative on May 16, 2023. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 44 similar instances when the indicator turned negative. In of the 44 cases the stock turned lower in the days that followed. This puts the odds of success at .
The 10-day moving average for CL crossed bearishly below the 50-day moving average on June 01, 2023. This indicates that the trend has shifted lower and could be considered a sell signal. In of 16 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where CL declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
Bullish Trend Analysis
The RSI Indicator shows that the ticker has stayed in the oversold zone for 5 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an Uptrend is expected.
The Stochastic Oscillator shows that the ticker has stayed in the oversold zone for 9 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an upward trend is expected.
The 50-day moving average for CL moved above the 200-day moving average on May 10, 2023. This could be a long-term bullish signal for the stock as the stock shifts to an upward trend.
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where CL advanced for three days, in of 331 cases, the price rose further within the following month. The odds of a continued upward trend are .
CL may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
The Aroon Indicator entered an Uptrend today. In of 336 cases where CL Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
Fundamental Analysis (Ratings)
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 81, placing this stock better than average.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Seasonality Score of (best 1 - 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating fairly steady price growth. CL’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (166.667) is normal, around the industry mean (68.911). P/E Ratio (39.216) is within average values for comparable stocks, (184.270). Projected Growth (PEG Ratio) (2.716) is also within normal values, averaging (7.227). Dividend Yield (0.025) settles around the average of (0.028) among similar stocks. P/S Ratio (3.415) is also within normal values, averaging (69.812).
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Fundamental Analysis Ratings
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
General Information
a maker of oral, personal, and household products
Industry HouseholdPersonalCare
CL and
Correlation & Price change
A.I.dvisor indicates that over the last year, CL has been closely correlated with PG. These tickers have moved in lockstep 75% of the time. This A.I.-generated data suggests there is a high statistical probability that if CL jumps, then PG could also see price increases.
