Colgate-Palmolive (NYSE:CL | CL Price Prediction) lost a key Wall Street backer on Tuesday as TD Cowen analyst Robert Moskow downgraded the stock from Buy to Hold and cut his price target to $85 from $96, citing surging oil-based input costs tied to the Iran War. The move signals that even a consumer staples stalwart with 63 consecutive years of dividend increases is not immune to commodity-driven margin compression.
| Ticker | Company | Firm | Old → New Rating | New Price Target | One-Line Takeaway |
|---|---|---|---|---|---|
| CL | Colgate-Palmolive | TD Cowen | Buy → Hold | $85 (from $96) | Oil cost spike and U.S. weakness prompt earnings estimate cuts for 2026 and 2027 |
The Analyst’s Case
TD Cowen cut its 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. WTI crude hit a 12-month high of $98.71 on March 20, 2026, and has surged 33.9% on a monthly basis from late February levels, compressing the input cost assumptions embedded in Colgate’s existing guidance.
TD Cowen also flagged that the U.S. division may require incremental investment to improve sales, given weak results in 2025 and a slow start in 2026. That concern has data behind it: North America posted a -1.8% organic sales decline in Q4 2025 and has logged negative organic growth in every quarter of 2025.
Company Snapshot & Recent Performance
Colgate delivered a solid Q4 2025 on the surface. Non-GAAP EPS came in at $0.95 against a $0.91 consensus estimate, while revenue of $5.23 billion beat the $5.13 billion estimate and grew 5.8% year-over-year. Full-year free cash flow reached $3.634 billion, and the company returned $2.9 billion to shareholders through dividends and buybacks.
The forward picture is murkier. Management’s 2026 guidance for net sales growth of 2% to 6% and low-to-mid-single-digit Base Business EPS growth was calibrated to tariffs announced as of January 28, 2026, well before the Iran War oil spike that TD Cowen now treats as a material earnings headwind.
Why the Move Matters Now
The stock has already pulled back sharply. Colgate shares fell 13.53% over the past month, dropping from $99.14 to $85.73, placing the stock almost exactly at TD Cowen’s new $85 target. The analyst consensus target sits at $97.68, with 12 buy ratings and only 1 sell, suggesting the broader Street remains more constructive.
The stock trades at a trailing P/E of 33x against a sector that typically commands a lower multiple, leaving limited room for earnings estimate cuts without further price pressure.
What Investors Should Watch
Colgate’s global toothpaste market share of 41.2% and dominant emerging markets presence remain genuine long-term competitive advantages. TD Cowen acknowledges that investors believe Colgate’s emerging markets platform provides more pricing power than peers, but projects that domestic headwinds and oil-driven cost inflation will suppress near-term earnings growth. Retirement-focused investors should weigh the dividend track record against a cost environment that the company’s own guidance did not fully anticipate.
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