The firm also increased its price target to $80 from $78 on shares of the New York-based consumer products company.
"While the potential for a resurgence of volatility of course exists, FX has stabilized, creating a more sustainable backdrop for margin improvement, with emerging markets growth also leveling out in the MSD-HSD range, the high-end vs. peers," BofA/Merrill wrote in a note earlier today.
The firm believes Colgate-Palmolive is well positioned to recapture earnings per share growth closer to a double-digit pace with external pressures more manageable, a return to robust gross margin expansion, a reasonable competitive environment in oral care and a best-in-class growth profile.
While currency is still weighing on results, the company has been one of the most consistent performers in staples, helped by its dominant share positions, which offer insulation from challenged markets and critical pricing power, BofA/Merrill added.
More than 4.5 million of the company's shares changed hands today vs. its average volume of roughly 2.5 million shares per day.
Separately, TheStreet Ratings Team has a "Hold" rating with a score of C on the stock.
The primary factors that have impacted the rating are mixed. The company's strengths can be seen in multiple areas, such as its expanding profit margins, good cash flow from operations and solid stock price performance.
But the team also finds that net income has been generally deteriorating over time.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: CL