Colgate-Palmolive (NYSE:CL) was raised to Outperform from Market Perform at Raymond James on Monday, with analysts assigning the stock a $91 per share price target.
The firm sees an "upside opportunity" for the stock in 2024 following its fourth-quarter earnings and full-year guidance.
"Volume has flattened (up excluding lower private label volume for Hill’s), raw material pressures ex-FX have abated, and cost improvements have been material, allowing the company to invest more substantially in advertising and overall brand support," noted analysts.
"In our view, CL is still in the early innings of improved top and bottom-line growth, balancing contribution from volume vs price, emerging markets vs developed, and across the product portfolio," they added.
With a steadier pace on innovation, continued premiumization in Oral Care, and an opportunity for increased category penetration for Hill’s, Raymond James sees solid potential for the company to continue driving sales growth ahead of its long-term target ranges and towards the upper end of peers, in turn driving upside in the shares.
"CL shares currently trade at 24x our 2024 EPS estimate of $3.46, in line with 5- and 10-year historical averages, which we believe leaves room for upside as volume inflects," the analysts concluded.