Early on Tuesday, analysts at Bank of American downgraded consumer goods maker Colgate-Palmolive Company (CL) due to its current valuation, but the firm did increase the price target on CL.
The analysts downgraded CL from “Buy” to “Neutral” and increased its price target from $115 to $119. This new target suggests a 4% upside to Monday’s closing price of $114.01.
A Bank of America analyst noted, “CL is +5% since the announcement of a 32% bolivar devaluation, which CL subsequently said would drive a 20-28c p/s drag to 2013 EPS. CL’s performance makes it one of the top Staples stocks over that time frame, and has resulted in 1.5 turns of P/E expansion. We still see CL as one of the top long-term growth stories in large cap HPC, based on high, margin-accretive exposure to fast-growth emerging markets oral care categories. Near-term however, CL has a difficult organic sales growth hurdle to overcome, and valuation is near the top of the peer set at 20.2x our 2013 EPS est.”
Colgate-Palmolive shares were inactive during pre-market trading on Tuesday. The stock is up +22.2% over the past year.
The Bottom Line
Shares of Colgate Palmolive Company (CL) have a dividend yield of 2.18% based on last night’s closing price of $114.01 and the company’s annualized dividend payout of $2.48 per share.
Colgate-Palmolive Company (CL) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.
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