Colgate-Palmolive (CL) Earnings Beat 5-Year Growth Average, Reinforcing Steady-Growth Narrative

Colgate-Palmolive (CL) reported 2.4% earnings growth over the past year, beating its five-year average growth rate of 2.2% per year. Net profit margin edged up to 14.5% from 14.2% last year, and earnings are projected to grow at 6.8% annually, with revenue expected to climb by 3.3% per year. Both rates trail the broader US market’s growth forecasts. Investors are balancing steady profit and revenue momentum, an appealing dividend, and modest financial risks as they weigh the stock’s constructive outlook amid a slower growth profile.

See our full analysis for Colgate-Palmolive.

The next step is to see how these headline numbers align with the broader narratives. Some long-held market views may be reinforced while others could get challenged by Colgate-Palmolive’s latest results.

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Profit Margin Extends to 14.5%

• Colgate-Palmolive’s net profit margin ticked up to 14.5%, compared to 14.2% last year, reflecting a steady ability to turn sales into bottom-line profits as costs continue to rise.
• According to the analysts' consensus view, ongoing productivity initiatives and digital investments are keeping margins resilient, even as persistent cost pressures and tough consumer markets continue to test the company’s pricing power and long-term growth outlook.
• Stable profit margins support the view that core brands and operational upgrades are sheltering earnings from global market cycles.
• However, analysts remain watchful, as continued cost inflation and weaker consumer demand still threaten further margin expansion in upcoming periods.

Analysts see margin resilience as a key foundation for future growth, but wonder if it’s enough to offset persistent cost headwinds and competitive threats. 📊 Read the full Colgate-Palmolive Consensus Narrative.

PE Ratio Sits Below DCF Fair Value

• Colgate-Palmolive’s price-to-earnings ratio of 21.4x is notably below its DCF fair value of 129.35, signaling a relative valuation cushion compared to where cash flows suggest the share price could be.
• Analysts' consensus points out that while the PE is above the industry average, it leaves room for upside if projected earnings materialize. Yet this optimism is balanced by the reality that analyst price targets are just 16.3% above the current $77.05 share price, displaying little margin for disappointment.
• Consensus expectations pin future upside on reaching $3.5 billion in annual earnings and $22.4 billion in revenues by 2028, with a materially higher future PE ratio priced in.
• Realizing this full potential depends on Colgate-Palmolive’s ability to drive both premiumization and success in emerging markets while managing margin risk and competition.

Emerging Market Growth Remains Central

• The consensus narrative notes that international expansion, especially into rapidly urbanizing countries in Latin America, India, and Southeast Asia, remains the primary engine for volume gains and sales acceleration, with brand investment across 75 global markets aiming to lock in this advantage.
• Analysts highlight a crucial tension here. Even though emerging markets drive top-line growth and pricing power, softness in segments like China and India, plus local competition and macro turmoil, limit the pace of progress and keep Colgate-Palmolive’s projected revenue growth below the broader US market.
• Strategic focus on premium offerings and local innovation is expected to support long-term expansion, but near-term volatility and cost challenges persist.
• Efforts to stabilize categories and reinforce daily-use brands, like Colgate Total, could help protect earnings, even as global market risks evolve.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Colgate-Palmolive on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

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A great starting point for your Colgate-Palmolive research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

See What Else Is Out There

Colgate-Palmolive’s revenue and earnings are projected to grow more slowly than the broader US market. The company is also facing cost and competitive headwinds that could limit near-term margin gains.

If you want faster growth than Colgate-Palmolive’s more modest outlook, check out high growth potential stocks screener (60 results) to see which established names are set for stronger earnings over the next few years.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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