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Home>Colgate-Palmolive's stock surges as analyst sees 'rare opportunity' to buy

Colgate-Palmolive's stock surges as analyst sees 'rare opportunity' to buy

Colgate-Palmolive's stock surges as analyst sees 'rare opportunity' to buy

09/25/2017

Shares of Colgate-Palmolive Co. (CL) ran up 3.4% toward a 2 1/2-month high in midday trade Monday, after the consumer products company was upgraded at Morgan Stanley, citing valuation and expectations of a re-acceleration in sales growth. Analyst Dara Mohsenian raised his rating to overweight from equal weight, and lifted his stock price target to $84 from $75. In a recent survey of investors, Mohsenian said Colgate-Palmolive scored the lowest on sentiment among the mega-cap consumer staples companies covered, which likely stems from three-straight quarters of sales growth disappointments and subpar earnings quality. But Mohsenian said he believes revenue growth will accelerate given easier comparisons and a rebound in emerging markets, at a time when the market is "mispricing" the company's strategic options and competitive position. "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. The stock has lost 3.1% over the past three months, while the SPDR Consumer Staples Select Sector ETF (XLP) has eased 2.2% and the S&P 500 has gained 2.2%.

-Tomi Kilgore; 415-439-6400; AskNewswires@dowjones.com

 

(END) Dow Jones Newswires

09-25-17 1212ET

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