Up 8% Last Month, Colgate-Palmolive Stock Looks Unlikely To Continue Its Rally

Colgate Palmolive stock (NYSE: CL) is up almost 8% in the past month (21 trading days), outperforming the S&P 500 which was down a marginal 1% over this period. If you look at the change over the last five and ten days, too, the stock has risen 0.9% and 5.9% respectively, outperforming the broader markets on both occasions. Colgate’s most recent FY ’21 earnings saw revenue rise to $17.4 billion, up from $16.5 billion in FY ’20. However, a $571 million goodwill and intangible impairment charge weighed on operating income, dragging it down to $3.33 billion, down from $3.89 billion in FY ’20. Combined with a rise in the effective tax rate, net income dropped from $2.86 billion in FY ’20 to $2.34 billion in FY ’21. Despite this, the stock has rallied over the past weeks over expectations of a demand revival and a favorable foreign currency impact.

Now, is CL stock set to continue its outperformance or could we expect a pullback? We believe that there is a low 27% chance of a rise in CL stock over the next month (21 trading days) based on our machine learning analysis of trends in the stock price over the last ten years. See our analysis on CL Stock Chance of Rise. For additional details about the company’s historical returns and comparison to peers, see Colgate Palmolive (CL) Stock Return. Additionally, for details about CL EBITDA and comparison to peers, see Colgate Palmolive (CL) EBITDA Comparison.

Twenty-One Day: CL 7.7%, vs. S&P500 -0.7%; Outperformed market

(3% likelihood event; 27% probability of rise over next 21 days)

• CL stock rose 7.7% the last twenty-one trading days (one month), compared to a broader market (S&P500) marginal drop of 0.7%
• A change of 7.7% or more over twenty-one trading days is a 3% likelihood event, which has occurred 79 times out of 2516 in the last 10 years
• Of these 79 instances, the stock has seen a positive movement over the next twenty-one trading days on 21 occasions
• This points to a 27% probability for the stock rising over the next twenty-one trading days

Ten Day: CL 5.9%, vs. S&P500 -3.3%; Outperformed market

(3% likelihood event; 55% probability of rise over next 10 days)

• CL stock gained 5.9% over the last ten trading days (two weeks), compared to a broader market (S&P500) drop of 3.3%
• A change of 5.9% or more over ten trading days is a 3% likelihood event, which has occurred 64 times out of 2516 in the last 10 years
• Of these 64 instances, the stock has seen a positive movement over the next ten trading days on 35 occasions
• This points to a 55% probability for the stock rising over the next ten trading days

Five Day: CL 0.9%, vs. S&P500 -2.2%; Outperformed market

(33% likelihood event; 55% probability of rise over next five days)

• CL stock rose 0.9% over a five-day trading period ending 4/14/2022, compared to the broader market (S&P500) which was down around 2.2% over this period.
• A change of 0.9% or more over five trading days (one week) is a 33% likelihood event, which has occurred 837 times out of 2517 in the last 10 years
• Of these 837 instances, the stock has seen a positive movement over the next five trading days on 457 occasions
• This points to a 55% probability for the stock rising over the next five trading days

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[1] Month-to-date and year-to-date as of 4/18/2022
[2] Cumulative total returns since the end of 2016

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