Colgate-Palmolive (CL) Stock Forecast & Price Target

Colgate-Palmolive has demonstrated robust growth in its advertising expenditures, increasing from 11.6% of sales in 2021 to 13.5% in 2024, indicating a strategic focus on brand visibility and market penetration. The company has also effectively managed to grow both prices and volumes from the second quarter of 2023 through the third quarter of 2024, showcasing resilience in its sales strategy amidst market fluctuations. With approximately 70% of its business stemming from international markets, including 45% from emerging regions, Colgate-Palmolive is well-positioned to capitalize on expanding global consumer demand.

Colgate-Palmolive experienced a gross margin decline of 75 basis points year-over-year in 2Q25, attributed to rising raw material costs and tariffs, which raises concerns about its operational efficiency. In addition, the company's sales volume has shown a downward trend, with declines of 0.3% in 1Q25 and 0.9% in 2Q25, despite achieving positive price growth during the same periods. Further complicating the outlook, the dog food category, which significantly contributes to revenue through Hill's brand, is witnessing an accelerating decline in U.S. retail channels, decreasing by 2.8% in 3Q25 year-to-date.