BofA/Merrill analyst Olivia Tong downgraded Colgate-Palmolive (CL) to Neutral from Buy with a price target of $74, down from $77. The analyst notes that while the company has improved its organic sales growth and launched a "meaningful innovation" in its toothpaste and pet categories, she is concerned with its struggles to reverse market share losses in toothpaste as well as the more challenging comps expected in 2020. Tong contends that 2020 may become another year of "outsized investment", adding that Procter & Gamble (PG) may be preferred by investors given its faster growth rate at a similar valuation.

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Based on current spot rates: The company is raising its net sales growth guidance to 2% to 5% (versus 1% to 4% previously) including a mid-single-digit negative impact from foreign exchange (versus low-single-digit negative impact previously). FY24 revenue consensus $18.83B. The company is raising its organic sales growth guidance to 5% to 7% (versus 3% to 5% previously). On a GAAP basis, the company still expects gross profit margin expansion, increased advertising investment and double-digit earnings-per-share growth. On a non-GAAP (Base Business) basis, the company still expects gross profit margin expansion, increased advertising investment and mid to high-single-digit earnings-per-share growth.

Reports Q1 revenue $5.07B, consensus $4.63B. Noel Wallace, Chairman, President and Chief Executive Officer, commented on the Base Business first quarter results, "We are very pleased to have started 2024 with another quarter of strong top and bottom line performance as we continued to execute our strategy successfully. Net sales increased 6.2% and organic sales grew 9.8%, with organic sales growth in every division and across all categories. We are particularly pleased to have delivered double-digit growth in operating profit, net income and earnings per share for the third consecutive quarter while still investing for the long-term health of our business. The strong gross and operating margin expansion in the quarter funded a 16% increase in advertising and we expect strong levels of brand investment over the balance of 2024. We also continued to invest behind building and scaling the capabilities needed to drive our growth going forward, in areas like innovation, digital, data and analytics, revenue growth management and marketing effectiveness. Our strong growth momentum and great start to the year add to our confidence that we are executing the right strategies to deliver on our updated 2024 financial targets and generate consistent, compounded earnings per share growth."

Notable companies reporting before tomorrow's open, with earnings consensus, include Exxon Mobil (XOM), consensus $2.20... Chevron (CVX), consensus $2.87... AbbVie (ABBV), consensus $2.23... HCA Healthcare (HCA), consensus $5.01... Colgate-Palmolive (CL), consensus 81c... Charter (CHTR), consensus $7.92... AutoNation (AN), consensus $4.27.