Colgate-Palmolive Company’s Q2 Preview

Deutsche Bank analysts provided their outlook on Colgate-Palmolive Company (NYSE:CL) ahead of the company’s upcoming Q2 results, which are scheduled to be reported on July 29.
The analysts made modest revisions to their estimates to reflect a worsening currency backdrop, offset partly by potential commodity cost relief on the horizon and company-specific mitigation efforts (e.g., incremental overseas pricing).
While scanned channel consumption in the US was robust this quarter from strong pricing and a normalized supply chain, the analysts noted this strength is likely to be balanced by tougher comps in untracked channels.
Favorable peer commentary on robust pet food demand should support sustained top-line momentum at Hill’s; however, the analysts mentioned that supply tightness could limit upside. Internationally, the analysts expect performance has varied, with the company speaking constructively on Latam demand resilience, but more cautiously on Europe given rapidly rising energy costs and the war in Ukraine affecting consumer sentiment.
While recent USD strength likely pressures 2022-dollar EPS, the analysts believe the company’s improving organic growth, operational/supply chain recovery, and potentially abating commodity pressure should allow it to reiterate its full-year 2022 guidance, albeit possibly skewed toward the low end of the range.

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