CL Stock Risk & Deep Value Analysis
Colgate-Palmolive Co
Consumer Defensive • Household & Personal Products
DVR Score
out of 10
What You Need to Know About CL Stock
We analyzed Colgate-Palmolive Co using our deep value framework. Sign in to see our full verdict and DVR Score.
We ran CL through our deep value framework — analyzing financial health, distress signals, competitive moat, and risk factors. Our risk assessment: Moderate. Here's what we found.
CL Risk Analysis & Red Flags
What Could Go Wrong
Colgate-Palmolive carries a high debt-to-equity ratio (often 4.0x-6.0x or higher as per recent SEC filings) and tight liquidity (current ratio typically below 1.0). An inability to service or refinance this debt at favorable rates, especially if interest rates rise or operating cash flow contracts by more than 10-15%, could severely limit its ability to invest in growth or maintain its dividend.
Risk Matrix
Overall
Moderate
Financial
High
Market
Low
Competitive
Medium
Execution
Low
Regulatory
Low
Red Flags
- ⚠
High Debt-to-Equity: Persistent high leverage (4.0x-6.0x+) relative to peers from recent 10-K filings, indicating significant financial risk.
- ⚠
Tight Liquidity: Current ratio typically below 1.0 based on recent 10-Q filings, suggesting potential short-term cash flow constraints.
- ⚠
Lack of 10x Growth Catalysts: Despite stable operations, there are no identifiable fundamental shifts or market opportunities to drive 10x revenue or EPS growth within 3-5 years.
Upcoming Risk Events
- 📅
Q2 2026 Earnings Miss (July 31, 2026): A miss on EPS consensus of $0.95 or organic sales below 4% could lead to analyst downgrades and price target reductions.
- 📅
Increased Input Costs (Ongoing FY2026-FY2027): Sustained increases in raw material or transportation costs, if not offset by pricing power, leading to a 100+ basis point decline in gross margin, impacting profitability guidance.
When to Reconsider
- 🚪
Exit if organic sales growth falls below 2% for two consecutive quarters, signaling a loss of market momentum.
- 🚪
Sell if gross margin falls below 58% in any quarter, indicating inability to manage input costs or pricing power erosion.
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What Does Colgate-Palmolive Co (CL) Do?
Market Cap
$67.72B
Sector
Consumer Defensive
Industry
Household & Personal Products
Employees
34,000
Colgate-Palmolive Company, together with its subsidiaries, manufactures and sells consumer products in the United States and internationally. It operates through two segments: Oral, Personal and Home Care; and Pet Nutrition. The Oral, Personal and Home Care segment offers toothpaste, toothbrushes, mouthwash, bar and liquid hand soaps, shower gels, shampoos, conditioners, deodorants and antiperspirants, skin health products, dishwashing detergents, fabric conditioners, household cleaners, and other related items. This segment markets and sells its products under the Colgate, Palmolive, Darlie, elmex, hello, meridol, Sorriso, Tom's of Maine, EltaMD, Filorga, Irish Spring, Protex, Sanex, Softsoap, Lady Speed Stick, Speed Stick, PCA SKIN, Ajax, Axion, Fabuloso, Murphy, Suavitel, and Soupline brands to a range of traditional and eCommerce retailers, wholesalers, and distributors, as well as dentists and skin health professionals. It also offers pharmaceutical products for dentists and other oral health professionals. The Pet Nutrition segment offers pet nutrition products for everyday nutritional needs under the Hill's Science Diet brand; and a range of therapeutic pet products to help nutritionally support dogs and cats in different stages of health under the Hill's Prescription Diet brand. This segment markets and sells its products through pet supply retailers, veterinarians, and eCommerce retailers. Colgate-Palmolive Company was founded in 1806 and is headquartered in New York, New York.
Visit Colgate-Palmolive Co WebsiteInvestment Thesis
If Colgate-Palmolive continues to leverage its powerful global brands and efficient scale to deliver consistent mid-single-digit organic sales growth (e.g., 4-6% YoY) while executing on productivity initiatives to maintain premium gross margins (60%+), then the stock can provide stable, dividend-adjusted returns consistent with a defensive consumer staples investment. This thesis appeals to income-focused investors seeking capital preservation and modest appreciation, but it does *not* align with the high-risk, high-reward 10x growth potential sought by this analysis.
Is CL Stock Undervalued?
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CL Price Targets & Strategy
12-Month Target
$93.50
Bull Case
$100.00
Bear Case
$80.00
Valuation Basis
24x forward P/E applied to estimated FY2026 EPS of $3.90
Entry Strategy
For stable income, consider dollar-cost averaging near current levels ($88-$89) or on dips towards $85, which has acted as a support zone in late 2025.
Exit Strategy
Take profit at $95 (analyst consensus target) for conservative investors; consider stop-loss at $82 if fundamentals deteriorate or market sentiment shifts negatively.
Portfolio Allocation
1-3% for moderate risk tolerance (purely as a defensive, income-generating component, not for 10x growth)
Price Targets & Strategy
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Is CL Financially Healthy?
Valuation
P/E Ratio
32.45
Forward P/E
34.54
EV/EBITDA
36.00
PEG Ratio
4.41
Price/Book
32.00
Price/Sales
7.50
Profitability
Gross Margin
60.06%
Operating Margin
15.42%
Net Margin
10.04%
Return on Equity
475.13%
Revenue Growth
4.25%
EPS
$2.58
Balance Sheet
Current Ratio
0.83
Quick Ratio
0.45
Debt/Equity
147.93
Cash Flow
Operating Cash Flow
$4.20B
Other
Beta (Volatility)
0.33
Dividend Yield
2.50%
Does CL Have a Competitive Moat?
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🏰 Wide
Moat Trend
Stable
Moat Sources
3 Identified
Colgate's moat is exceptionally durable due to the essential nature of its products (oral hygiene, personal care, pet food), deeply ingrained consumer habits, and immense global brand recognition built over decades. Its efficient global scale allows for cost advantages in manufacturing and distribution, making it difficult for new entrants to compete on price or reach. Intellectual property in key product areas further reinforces its competitive position.
Moat Erosion Risks
- •Intense Competition & Private Label Growth: Increasing pressure from private label brands and aggressive marketing by direct competitors (e.g., P&G, Unilever) could erode market share or pricing power.
- •Shifting Consumer Preferences: Failure to adapt quickly to emerging trends (e.g., sustainable packaging, 'natural' ingredients, DTC models) could lead to gradual erosion of brand relevance and loyalty.
CL Competitive Moat Analysis
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CL Market Intelligence
Sentiment & Insider Activity
Social Sentiment
Neutral (Consistent with a stable, large-cap consumer staples company; not a high-interest stock for viral retail investor discussions or significant speculative interest.)
Institutional Sentiment
Neutral to Positive (Average rating 'Moderate Buy' with 12 Buy and 6 Hold ratings. Recent slight upgrade from Weiss Ratings from Hold (c) to Hold (c+) on May 4, 2026, reflects incremental positive sentiment.)
Insider Activity (Form 4)
Routine director equity grants observed on May 11, 2026, for Harris C. Martin (1,556 shares, 2,424 options) and John P. Bilbrey (2,075 shares, 2,424 options). No open-market purchases or sales by senior executives (CEO/CFO) were identified in the last 90 days from the provided research.
Options Flow
Normal options activity (No specific unusual call or put activity was highlighted in the provided research, suggesting typical institutional hedging or speculative interest rather than significant directional bets.)
Earnings Intelligence
Next Earnings
2026-07-31
Surprise Probability
Medium
Historical Earnings Pattern
Colgate-Palmolive typically exhibits stable stock price reactions to earnings reports, with modest movements (2-4%) on beats or misses, reflecting its low-volatility consumer staples nature. Significant surprises or guidance changes can lead to slightly larger shifts.
Key Metrics to Watch
Competitive Position
Top Competitor
PG
Market Share Trend
Stable (Colgate maintains strong global leadership in oral care and has stable, incremental gains/losses in other categories, primarily through product innovation and targeted regional strategies rather than disruptive shifts.)
Valuation vs Peers
CL typically trades at a slight premium to the broader consumer staples sector on a P/E basis, reflecting its perceived stability, brand strength, and consistent dividend, but generally in line with direct peers like P&G or Unilever.
Competitive Advantages
- •Strong Brand Power (Global recognition and consumer loyalty for core brands like Colgate, Palmolive, Hill's Pet Nutrition)
- •Efficient Distribution Network (Extensive global supply chain and retail presence in over 200 countries)
- •Intangible Assets/IP (Significant R&D in areas like oral health, proprietary formulations for pet nutrition)
Market Intelligence
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What Could Drive CL Stock Higher?
Near-Term (0-6 months)
- •Q2 2026 Earnings Report (July 31, 2026): Beat on EPS consensus of $0.95 and organic sales growth above 5% could lead to a minor re-rating in line with sector peers.
- •New Product Launches (Ongoing Q3-Q4 2026): Introduction of premium oral care or pet nutrition products, if gaining >2% market share in their niche, could signal continued innovation for incremental growth.
Medium-Term (6-18 months)
- •Productivity Program Impact (FY2027 onwards): Sustained gross margin expansion (e.g., +50 bps per year) from efficiency initiatives, demonstrating effective cost management in a high-inflation environment.
- •Emerging Market Expansion (Ongoing FY2027): Double-digit organic sales growth from specific new geographies (e.g., Southeast Asia, Latin America) for targeted product categories, contributing >$100M in new annual revenue.
Long-Term (18+ months)
- •Strategic Niche Acquisition (FY2028+): Acquisition of a fast-growing, high-margin direct-to-consumer (DTC) personal care or pet food brand, accelerating portfolio premiumization and contributing >$500M in new annual revenue if integrated successfully.
- •Sustainability Leadership (FY2029+): Achieving top-tier ESG ratings and significant market share gains (>5% in targeted categories) due to verifiable sustainable product lines, appealing to environmentally conscious consumers and driving brand premiumization.
Catalysts & Growth Drivers
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What's the Bull Case for CL?
- ✓
Watch quarterly organic sales growth: A sustained deceleration below 3% could signal market share losses or weakening brand health.
- ✓
Monitor gross margin trends: Consistent decline of more than 50 basis points per year could indicate failure to manage input costs or pricing pressure.
Bull Case Analysis
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Competing with CL
See how Colgate-Palmolive Co compares to related companies
| Company | Market Cap | DVR Score | P/E | Revenue | Profit Margin | Rev Growth | |
|---|---|---|---|---|---|---|---|
Colgate-Palmolive Co CL | $67.7B | 1.3 | 32.4 | $20.4B | 10.0% | 4.3% | |
Coca-Cola Co KO | $339.2B | 0.5 | 24.8 | $48.9B | 27.8% | 5.1% | Compare → |
PepsiCo Inc PEP | — | 0.1 | — | — | — | — | Compare → |
Procter & Gamble Co PG | $341.2B | 0.2 | 20.5 | $84.3B | 19.2% | 3.3% | Compare → |
Walmart Inc WMT | $972.0B | 0.7 | 42.8 | $713.2B | 3.1% | 5.9% | Compare → |
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How Colgate-Palmolive Co Makes Money
Colgate-Palmolive is a global consumer products company that manufactures and markets a wide array of household, health, personal care, and pet nutrition products. It makes money by selling these everyday essentials to consumers through various retail channels worldwide. Its business model relies on strong brand recognition, extensive distribution, and continuous product innovation to maintain market leadership in key categories.
Read Full Business Model BreakdownFAQ
What is the DVR Score for Colgate-Palmolive Co (CL)?
As of June 5, 2026, Colgate-Palmolive Co has a DVR Score of 1.3 out of 10, placing it in the "Distressed" category. This score is generated by our AI-powered deep value analysis framework that evaluates growth potential, financial health, competitive moat, and risk factors.
What is the market capitalization of Colgate-Palmolive Co?
Colgate-Palmolive Co's market capitalization is approximately $67.7B. The company operates in the Consumer Defensive sector within the Household & Personal Products industry.
What ticker symbol does Colgate-Palmolive Co use?
CL is the ticker symbol for Colgate-Palmolive Co. The company trades on the NYQ.
What is the risk level for CL stock?
Our analysis rates Colgate-Palmolive Co's overall risk as Moderate. This assessment considers execution risk, market risk, financial risk, competitive risk, and regulatory risk. For a full breakdown, see the risk analysis section above.
What is the P/E ratio of CL?
Colgate-Palmolive Co currently has a price-to-earnings (P/E) ratio of 32.4. This is above the market average, suggesting the stock may be priced for high growth expectations.
Does Colgate-Palmolive Co pay a dividend?
Yes, Colgate-Palmolive Co pays a dividend with a current yield of approximately 2.50%.
Is Colgate-Palmolive Co's revenue growing?
Colgate-Palmolive Co has reported revenue growth of 4.3%. The company is growing at a moderate pace.
Is CL stock profitable?
Colgate-Palmolive Co has a profit margin of 10.0%. The company is profitable but margins are modest.
How often is the CL DVR analysis updated?
Our AI-powered analysis of Colgate-Palmolive Co is refreshed regularly to incorporate the latest financial data, market conditions, and news. The most recent update was on June 5, 2026.
Important Disclaimer – Not Financial Advice
Deep Value Reports is an independent research platform for educational and informational purposes only. We are not financial advisors, investment advisors, or licensed professionals. The analysis, scores, and information provided on this page for CL (Colgate-Palmolive Co) should not be construed as personalized investment advice, a recommendation to buy or sell any security, or an offer to provide investment advisory services.
All investments involve risk, including the potential loss of principal. Past performance does not guarantee future results. Always conduct your own research, consider your financial situation, and consult with a qualified financial advisor before making any investment decisions.