TD downgrades Colgate-Palmolive on higher oil-based input costs

TD Cowen downgraded Colgate-Palmolive (CL) to Hold from Buy with a price target of $85, down from $96. The firm cut the company’s earnings estimates to reflect inflationary pressure from higher prices of oil-based inputs and potentially higher costs for tallow, which are up 40% versus a year ago on the Chicago Mercantile Exchange. While investors believe Colgate’s platform in emerging markets gives the company more pricing power than peers to offset inflation, the 13% negative revision to consensus earnings expectations in 2022 suggests its “resilience may not be as strong as investors believe,” the analyst tells investors in a research note. TD also thinks Colgate’s U.S. division may require incremental investment to improve sales given the “weak” results in 2025 and a slow start in 2026.