Colgate-Palmolive (CL) Shares Plunge 2.99% on Four-Day Slide Amid Mixed Earnings, Cautious Guidance

Colgate-Palmolive (CL) shares hit a new low on Thursday, declining 0.51% intraday and closing down 0.40% for the fourth consecutive day, marking a 2.99% drop over the past four sessions. The stock fell to its weakest level since December 2023, extending a downward trend fueled by mixed earnings and cautious guidance.

The recent earnings report for Q4 2024 underscored the pressure. Revenue of $4.94 billion missed estimates by $40 million, reflecting the first revenue decline in eight quarters. While adjusted EPS of $0.91 exceeded expectations, the company’s projection of flat revenue for 2025, citing foreign exchange headwinds, dampened investor optimism. This contrasted with CEO Noel Wallace’s bullish rhetoric, leaving the stock vulnerable to market skepticism.

Despite the earnings miss, institutional investors showed renewed interest. Entities including Cordatus Wealth Management, Hudson Capital Management, and Nordea Investment Management added to their stakes in late September, signaling long-term confidence in Colgate’s defensive profile. Analysts from HSBC and Morgan Stanley reinforced this sentiment with “Buy” ratings, citing the company’s stable cash flows and dividend yield. However, these positive signals were offset by mixed insider activity, including a $3.5 million share sale by CEO Wallace and CFO Jennifer Daniels, raising questions about management’s near-term outlook.

Broader market dynamics further complicated the stock’s trajectory. Rising oil prices and Federal Reserve policy tilted investor preferences toward dividend-paying blue chips, a category Colgate fits. Yet, the company’s exposure to supply chain costs and inflationary pressures in key markets like Western Europe and North America weighed on growth expectations. Meanwhile, strategic moves such as sustainability pledges and biopolymer packaging partnerships highlighted long-term value but failed to offset immediate concerns about margin compression.

Valuation debates persist, with analysts noting a potential 15.9% undervaluation based on fair value estimates. However, the stock’s modest year-to-date gain of 0.54% and ongoing foreign exchange challenges suggest a cautious outlook. While institutional backing and dividend reliability offer a floor, the path to recovery hinges on navigating macroeconomic volatility and demonstrating resilience in core markets.