Should You Buy Colgate-Palmolive Stock At $95?

April 3rd, 2025 by Trefis Team

Driven by its perceived defensive characteristics amidst macroeconomic uncertainties, Colgate-Palmolive (NYSE:CL) stock has fared better than the broader market so far in 2025, registering a 3% gain compared to the market’s 4% decline. This market downturn was triggered by President Donald Trump’s confirmation of tariffs. Our take on market crash risk right now offers an in-depth analysis of market crash risk in the current environment. Given this backdrop, the key question for investors is whether CL stock, currently trading around $94, represents a buying opportunity.

We believe CL stock looks attractive — making it a good pick to buy at its current price of around $94. We think there is minimal cause for concern with CL stock, which makes it attractive given that its current valuation looks moderate. We arrive at our conclusion by comparing the current valuation of CL stock with its operating performance over the recent years as well as its current and historical financial condition. Our analysis of Colgate-Palmolive along key parameters of Growth, Profitability, Financial Stability, and Downturn Resilience shows that the company has a very strong operating performance and financial condition, as detailed below.

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How Does Colgate-Palmolive’s Valuation Look vs. The S&P 500?

Going by what you pay per dollar of sales or profit, CL stock is currently valued in line with the broader market.

  • Colgate-Palmolive has a price-to-sales (P/S) ratio of 3.7 vs. a figure of 3.2 for the S&P 500
  • Additionally, the company’s price-to-operating income (P/EBIT) ratio is 17.2 compared to 24.3 for S&P 500
  • And, it has a price-to-earnings (P/E) ratio of 18.1 vs. the benchmark’s 24.3

How Have Colgate-Palmolive’s Revenues Grown Over Recent Years?

Colgate-Palmolive’s Revenues have grown marginally over recent years.

  • Colgate-Palmolive has seen its top line grow at an average rate of 4.9% over the last 3 years (vs. increase of 6.3% for S&P 500)
  • Its revenues have grown 3.3% from $19 Bil to $20 Bil in the last 12 months (vs. growth of 5.2% for S&P 500)
  • Also, its quarterly revenues shrank 0.1% to $4.9 Bil in the most recent quarter from $5.0 Bil a year ago (vs. 5.0% improvement for S&P 500)

How Profitable Is Colgate-Palmolive?

Colgate-Palmolive’s profit margins are much higher than most companies in the Trefis coverage universe.

Does Colgate-Palmolive Look Financially Stable?

Colgate-Palmolive’s balance sheet looks strong.

  • Colgate-Palmolive’s Debt figure was $8.5 Bil at the end of the most recent quarter, while its market capitalization is $76 Bil (as of 4/2/2025). This implies a strong Debt-to-Equity Ratio of 11.4% (vs. 19.0% for S&P 500). [Note: A lower Debt-to-Equity Ratio is desirable]
  • Cash (including cash equivalents) makes up $1.1 Bil of the $16 Bil in Total Assets for Colgate-Palmolive.  This yields a moderate Cash-to-Assets Ratio of 6.8% (vs. 14.8% for S&P 500)

How Resilient Is CL Stock During A Downturn?

CL stock has been more resilient than the benchmark S&P 500 index during some of the recent downturns. Worried about the impact of a market crash on CL stock? Our dashboard How Low Can Colgate-Palmolive Stock Go In A Market Crash? has a detailed analysis of how the stock performed during and after previous market crashes.

Inflation Shock (2022)

  • CL stock fell 19.6% from a high of $85.22 on 5 January 2022 to $68.48 on 10 October 2022, vs. a peak-to-trough decline of 25.4% for the S&P 500
  • The stock fully recovered to its pre-Crisis peak by 1 February 2024
  • Since then, the stock has increased to a high of $108.77 on 4 September 2024 and currently trades at around $94

COVID-19 Pandemic (2020)

  • CL stock fell 20.7% from a high of $76.27 on 23 February 2020 to $60.47 on 23 March 2020, vs. a peak-to-trough decline of 33.9% for the S&P 500
  • The stock fully recovered to its pre-Crisis peak by 30 July 2020

Global Financial Crisis (2008)

  • CL stock fell 32.4% from a high of $40.49 on 9 January 2008 to $27.39 on 27 October 2008, vs. a peak-to-trough decline of 56.8% for the S&P 500
  • The stock fully recovered to its pre-Crisis peak by 9 November 2009

 

Putting All The Pieces Together: What It Means For CL Stock

In summary, Colgate-Palmolive’s performance across the parameters detailed above are as follows:

  • Growth: Neutral
  • Profitability: Very Strong
  • Financial Stability: Strong
  • Downturn Resilience: Very Strong
  • Overall: Strong

Despite its robust performance across the aforementioned parameters, the current moderate valuation of CL stock does not fully reflect this strength. This discrepancy is precisely why we believe it appears an attractive pick, reinforcing our conclusion that CL stock is a buy at levels of $94.

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