Should traders buy CL before Q1 2025 earnings?
3/29/2025 05:25pm
**Traders should exercise caution and consider the following points before deciding to buy CL before its Q1 2025 earnings**:
1. **Current Market Sentiment**: Colgate-Palmolive has recently hit a 52-week low and fallen 40% from its October high due to soft demand and a weak demand environment, particularly in urban markets. This suggests that the market may not be receptive to positive news in the near term.
2. **Earnings Estimate**: The estimated EPS for Q1 2025 is $0.88, which represents a slight increase from the previous quarter's EPS of $0.91. The estimated revenue for the same period is $4.98 billion. While these estimates suggest a stable performance, the low revenue compared to the previous quarter's revenue of $5.12 billion could indicate a decline in sales.
3. **Recent Institutional Activity**: There has been some institutional buying, with Proficio Capital Partners LLC, UniSuper Management Pty Ltd, and TrueMark Investments LLC acquiring new stakes in the company. This could be seen as a positive signal, but it is important to consider the potential for further institutional selling.
4. **Goldman Sachs' Outlook**: Goldman Sachs has reaffirmed its "buy" rating on Colgate, citing the company's high-quality products and the potential for sustained growth in its Hill’s Pet Nutrition business. This long-term positive outlook may not translate to short-term price appreciation.
5. **Market Conditions**: The overall consumer packaged goods sector is facing challenges due to inflation, tariff uncertainties, and geopolitical fluctuations. These factors could continue to impact Colgate's performance in the near term.
In conclusion, while the estimated EPS and revenue for Q1 2025 suggest a stable performance, the low revenue compared to the previous quarter, the current market sentiment, and the broader sector challenges may make it a risky proposition to buy CL before its Q1 2025 earnings. Traders should carefully consider these factors and their own investment strategy before making a decision.