Piper Sandler Sees Colgate (CL) Reaccelerating in 2026, Lifts Price Target

Core Viewpoint - Colgate-Palmolive Company (NYSE:CL) is recognized as a potential investment opportunity, particularly in the consumer staples dividend stock category, with expectations for growth in 2026 despite current market challenges [1][2]. Group 1: Financial Performance and Market Position - Piper Sandler upgraded Colgate-Palmolive to Overweight from Neutral, raising the price target to $88 from $82, indicating confidence in the company's future growth potential [2]. - The company experienced continued softness in Q4, with a 2.3% price increase in Q3 but a 1.9% decline in volumes compared to the previous year [3]. - CEO Noel Wallace highlighted weak consumer sentiment in North America, with increased discount-seeking behavior and underperformance in household products [4]. Group 2: Market Challenges and Strategic Responses - Colgate cut its annual sales forecast due to rising economic uncertainty affecting consumer spending on higher-priced products, impacting everyday categories like oral and personal care [3]. - The company faces pressure from the "Buy Canadian" movement in Canada and weaker demand in Colombia, Central America, and India, alongside expected tariff-related costs of approximately $75 million [4]. - Colgate's strategy includes raising prices to offset the impact of U.S. tariffs, which has led some consumers to opt for cheaper alternatives [3]. Group 3: Growth Potential and Market Strategy - Colgate-Palmolive is positioned as a growth company with operations in Oral Care, Personal Care, Home Care, and Pet Nutrition, indicating a diversified portfolio [5]. - Analysts see early signs of improvement in emerging markets, which could enhance Colgate's growth trajectory if momentum continues [2].