NEW YORK (TheStreet) -- Shares of Colgate-Palmolive Co (CL) were retreating, down 1.16% to $66.29 in early market trading Thursday, after analysts at Morgan Stanley downgraded the consumer products giant earlier today.
Colgate-Palmolive had its rating cut to "equal weight" from "overweight" at Morgan Stanley on a valuation call.
Analysts at the firm said valuation now reflects the company's superior fundamentals and leaves little room for upside.
Morgan Stanley also lowered its price target on shares to $72 from $76, citing unfavorable currency pressures and a difficult competitive environment.
Yesterday, Colgate-Palmolive was upgraded by analysts at Societe Generale.
Analysts at Societe Generale raised their rating to "hold" with a higher price target of $68, saying the majority of growth headwinds are beginning to turn.
New York City-based Colgate-Palmolive is a consumer products company with oral care, personal care, home care, and pet nutrition products marketed in more than 200 countries and territories around the world.
Separately, TheStreet Ratings team rates COLGATE-PALMOLIVE CO as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate COLGATE-PALMOLIVE CO (CL) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its increase in net income, notable return on equity, expanding profit margins and growth in earnings per share. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Household Products industry. The net income increased by 39.7% when compared to the same quarter one year prior, rising from $388.00 million to $542.00 million.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Household Products industry and the overall market, COLGATE-PALMOLIVE CO's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The gross profit margin for COLGATE-PALMOLIVE CO is rather high; currently it is at 61.67%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 13.31% is above that of the industry average.
- COLGATE-PALMOLIVE CO has improved earnings per share by 40.5% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, COLGATE-PALMOLIVE CO reported lower earnings of $2.36 versus $2.39 in the prior year. This year, the market expects an improvement in earnings ($2.89 versus $2.36).
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 10.0%. Since the same quarter one year prior, revenues slightly dropped by 5.9%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- You can view the full analysis from the report here: CL Ratings Report