Colgate-Palmolive May Be Boring, But CL Stock Has Great Upside Potential Here

• Colgate-Palmolive (CL) shares are making the most of the latest market attempt to broaden.
• The stock currently maintains a 56% “BUY” technical opinion from Barchart, as short-term momentum indicators begin to turn constructive following a solid move up from April’s $82 bottom.
• CL is trading below its 52-week high of $99, but the recent move higher suggests that buyers are stepping in at these valuation multiples.
• The stock has a ways to go to retest its 2024 high of $105. However, in a market where AI is king, stocks like CL are worth a long look as alternatives to high-flying tech stocks. 

Today’s Featured Stock

Valued at $70 billion, Colgate-Palmolive (CL) is a global leader in oral care, personal care, and pet nutrition products. The company’s focus on core brands and pricing power has historically provided a cushion during periods of economic uncertainty.

What I’m Watching

I found today’s Chart of the Day by using Barchart’s powerful screening functions to sort for stocks with notably improving technicals, a combination of momentum, strength, and direction. I then used Barchart’s Flipcharts feature to review the charts for timely opportunities. CL checks those boxes.

CL has rallied as investors rotate back into consumer staples. Its 20-day moving average is climbing in a manner reminiscent of past rallies that carried the stock much higher for much longer than the current short-term rally. The PPO indicator is showing signs of curling upward, a sign of increasing momentum as the stock attempts to take aim at the $100 market again. The return to risk profile is becoming increasingly attractive for bulls.

Barchart Technical Indicators for Colgate-Palmolive

Editor’s Note: The technical indicators below are updated live during the session every 20 minutes and can therefore change each day as the market fluctuates. The indicator numbers shown below therefore may not match what you see live on the Barchart.com website when you read this report.

• 56% “BUY” via Barchart Opinion: The current technical rating reflects a positive trend with this indicator up from a level of 8% “SELL” a month ago.
• Trend Seeker Status: The Trend Seeker moved to “Buy” on May 6, and it is still trading around that level, indicating this is not a “past-tense” situation. A low-beta stock like CL often affords investors time to get in.
• The 200-day moving average appears to be in the process of breaking a flat trend and moving higher.
• Support Levels: Firm technical support is established at the $82 level.

Don’t Forget the Fundamentals

• $70 billion market capitalization.
• 23x trailing price-earnings ratio and forward P/E ratio.
• 2.4% dividend yield, providing a steady, if not spectacular, income component for total return investors.
• 5-year annualized revenue growth of 24%.
• 5-year annualized earnings growth of more than 20%.

Analyst and Investor Sentiment on Colgate-Palmolive

• Wall Street Analysts: Analysts 21 followed by Barchart rate CL a “Moderate Buy,” including 10 “Strong Buy” ratings.
• Price Targets: These range from a conservative $75 to a high of $105, with the average target around $95. 

The Bottom Line on Colgate-Palmolive

Colgate-Palmolive is currently in a base-building phase, showing the technical resilience needed to end its recent slide. While the stock is trading well off its $99 high from earlier this year, the current stock price level represents a logical entry point for a defensive rotation.

Rob Isbitts created the ROAR Score, based on his 40+ years of technical analysis experience. ROAR helps DIY investors manage risk and create their own portfolios. For Rob’s written research, check out ETFYourself.com.