CL Fair Value Estimate
$61.7227.5% overvalued
Blended fair value estimate based on DCF, Graham Number, and earnings-based models.
Colgate-Palmolive Company
Exchange: NYSESector: Consumer DefensiveIndustry: Household & Personal Products
Colgate-Palmolive Company is a caring, innovative growth company that is reimagining a healthier future for all people, their pets and our planet. Focused on Oral Care, Personal Care, Home Care and Pet Nutrition, we sell our products in more than 200 countries and territories under brands such as Colgate, Palmolive, elmex, hello, meridol, Sorriso, Tom’s of Maine, EltaMD, Filorga, Irish Spring, Lady Speed Stick, PCA SKIN, Protex, Sanex, Softsoap, Speed Stick, Ajax, Axion, Fabuloso, Murphy, Soupline and Suavitel, as well as Hill’s Science Diet and Hill’s Prescription Diet. The Company is recognized for its leadership and innovation in promoting sustainability and community wellbeing, including its achievements in decreasing plastic waste and promoting recyclability, saving water, conserving natural resources and improving children’s oral health through the Colgate Bright Smiles, Bright Futures program, which has reached approximately 1.8 billion children and their families since 1991.
Did you know?
Earnings per share grew at a 4.5% CAGR.
Current Price
$85.14
-0.32%GoodMoat Value
$61.72
27.5% overvaluedProfile
Valuation (TTM)
Market Cap$68.63B
P/E32.20
EV$75.34B
P/B1270.90
Shares Out806.06M
P/Sales3.37
Revenue$20.38B
EV/EBITDA19.67
Colgate-Palmolive Company (CL) Valuation
GoodMoat Analysis
Colgate-Palmolive appears unfavourable from a value investing perspective. The current price of $85.49 is 38% above the GoodMoat Target of $61.72, indicating a negative margin of safety. Its P/E of 32.3x is high relative to its modest 5.8% revenue growth.
Read full analysis
The valuation assessment reveals significant concerns. The primary tool is the DCF-based GoodMoat Target of $61.72. At a current price of $85.49, the stock trades at a -38% margin of safety, which falls deep into the 'Unfavourable' band per the framework's classification (MoS < 10%). This negative margin suggests the market price significantly exceeds the estimated intrinsic value. On a multiples basis, the forward P/E of 32.3x appears elevated. While the framework notes a P/E of 25-26x can be reasonable for a 50% grower, Colgate's 5.8% YoY revenue growth makes this multiple difficult to justify. The stock is priced for perfection despite its mature, slow-growth profile. The FCF yield of 5.3% is moderate but does not offset the extreme premium. When integrating this with the business quality assessment, the stock appears expensive relative to its fundamentals. The high P/E, negative margin of safety, and low growth create an unfavourable risk/reward setup for a value investor seeking a margin of safety. Analysis based on data as of 2024-05-15.
CL Valuation Metrics
FCF$3.63B
FCF Growth Rate4.45%
EPS Growth (CAGR)4.45%
WACC10.00%
Fair Value Models
Graham Number, PEG-based, and Earnings-based models
View Fair Value →CL Valuation & Fair Value Analysis
Colgate-Palmolive Company (CL) valuation analysis using multiple fair value methodologies. GoodMoat calculates a blended fair value target using discounted cash flow (DCF) analysis, the Graham Number, and earnings-based valuation models.
The GoodMoat Fair Value target for Colgate-Palmolive Company is $61.72. The current stock price is $85.14, suggesting the stock is 38.0% overvalued.
The price-to-earnings (P/E) ratio is 32.20. Price-to-book ratio is 1270.90. Price-to-sales ratio is 3.37. Enterprise value to EBITDA is 19.67. PEG ratio is -0.31.
GoodMoat's valuation models include the Graham Number (based on EPS and book value), an earnings-based model (discounted future EPS), and a PEG-adjusted valuation. The three models are averaged to produce a blended fair value estimate. Use these tools alongside the DCF calculator and reverse DCF to form a comprehensive view of Colgate-Palmolive Company's intrinsic value.