Does the Recent 5.7% Bounce Make Colgate-Palmolive Shares Worth a Closer Look in 2025?

• Ever wondered if Colgate-Palmolive deserves a spot in your portfolio, or if its current stock price is hiding a bargain? Let’s break down what’s really shaping the value behind this household brand.
• Shares are trading at $80.04, after bouncing back 5.7% over the past month despite dropping 1.1% in the last week. For the year, they’re still down 11.6%.
• Recently, the stock has seen activity following renewed consumer interest in essential goods, as supply chain improvements and marketing campaigns help the company regain its footing amid competitive pressures. Industry coverage highlights how Colgate-Palmolive’s global brand strength and strategic initiatives have sparked investor debate around its growth outlook and downside risk.
• If you’re curious about fundamentals, Colgate-Palmolive scores a 3 out of 6 on key valuation checks, suggesting some areas might be undervalued while others warrant a closer look. We’ll dig into the details of those valuation approaches next and reveal a more comprehensive way to judge its true worth at the end of the article.

Colgate-Palmolive delivered -15.2% returns over the last year. See how this stacks up to the rest of the Household Products industry.

Approach 1: Colgate-Palmolive Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates a company’s value by projecting its future free cash flows and discounting them back to today’s dollars. For Colgate-Palmolive, the analysis starts with its latest reported Free Cash Flow of approximately $3.38 Billion. Analysts provide forecasts for up to five years, beyond which projections are extrapolated based on reasonable growth assumptions.

Analyst consensus suggests Colgate-Palmolive’s Free Cash Flow could rise to nearly $4.0 Billion by 2029, with continued growth expected into the following decade. These projections, all denominated in USD, form the backbone of the DCF model and are used to calculate today’s fair value of the business by factoring in both time and risk.

Based on this approach, Colgate-Palmolive’s estimated intrinsic value is $122.83 per share. With the current share price at $80.04, the DCF implies the stock is trading at a 34.8% discount to its estimated fair value. On a cash flow basis, it appears to be substantially undervalued.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Colgate-Palmolive is undervalued by 34.8%. Track this in your watchlist or portfolio, or discover 923 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Colgate-Palmolive.

Approach 2: Colgate-Palmolive Price vs Earnings

The Price-to-Earnings (PE) ratio is a popular and practical metric for evaluating profitable companies like Colgate-Palmolive, because it relates a company’s share price directly to its bottom-line earnings. Investors often favor PE as it provides an immediate sense of how much they are paying for each dollar of current profit, which is especially meaningful when profits are stable or growing.

Determining what qualifies as a “normal” or “fair” PE involves considering the company’s expected earnings growth, its risk profile, and how it compares to competitors. Higher growth and lower risk typically justify a higher PE, while companies facing more uncertainty or slower expansion may trade at a lower PE.

Colgate-Palmolive currently trades at a PE ratio of 22.19x. By comparison, the average PE in the Household Products industry is 17.46x, and its listed peers average 20.46x. On the surface, this places Colgate-Palmolive above both sector and peer groups, which might suggest a premium valuation.

This is where Simply Wall St’s Fair Ratio is relevant. The proprietary Fair Ratio for Colgate-Palmolive is 22.50x. Unlike basic industry or peer comparisons, the Fair Ratio considers factors like projected earnings growth, profit margins, company size, and risk. This results in a more tailored benchmark that is more reflective of what the business deserves in today’s market.

With Colgate-Palmolive’s current PE of 22.19x sitting very close to its Fair Ratio of 22.50x, the valuation appears in line with what you might expect given its profile and outlook.

Result: ABOUT RIGHT

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1439 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Colgate-Palmolive Narrative

Earlier we mentioned there is an even better way to understand valuation, so let’s introduce you to Narratives. A Narrative is a simple, story-driven approach to investing that connects your unique view of Colgate-Palmolive’s business to real numbers using your own assumptions about future growth, margins, and fair value.

Instead of relying solely on traditional ratios, Narratives let you easily translate how you see the company’s future into a personalized forecast and then instantly see what the business could be worth today based on those beliefs.

This feature is available to all users directly on Simply Wall St’s Community page, where millions of investors share their Narratives, compare perspectives, and update valuations as new information comes out. This allows you to track not just the official analyst view but also the latest collective sentiment.

Narratives make it straightforward to decide how you want to view your shares by helping you weigh where your own estimated fair value sits relative to the current market price, all with a glance.

For Colgate-Palmolive, for example, some investors see significant upside. The highest projected fair value was $106, while others are more cautious, with the lowest at $83. No single view is “correct,” but Narratives empower you to invest with the confidence of your own informed story.

Do you think there's more to the story for Colgate-Palmolive? Head over to our Community to see what others are saying!

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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