Analysts expect Colgate-Palmolive's near-term growth to remain sluggish

Nomura gave a neutral rating on the company with a target price of Rs 1,550 per share. The firm noted that execution of new strategy is the key for the company. Higher investments and execution will be key to company's four-pillar growth strategy.

Axis Securities downgraded the rating to hold with a target price of Rs 1,550. The brokerage praised company’s growth through initiatives such as launching science-based premium products to drive overall realisations, category development by driving awareness through marketing initiatives, increasing frequency of consumption and penetration in rural, and expanding personal care portfolio to derisk from slow growing oral care category.

However, Axis Sec said that the strategy would have a long gestation period and would require consistent investment in the arena of market development (higher marketing and ad-spends) which will put pressure on the company’s bottom line in the near term.

Motilal Oswal does not expect earnings growth to resume strongly over the medium term and maintained a neutral call with a target price of Rs 1,565. The brokerage said, "While initiatives for growth under the new CEO are welcoming, we do not see any material change in business prospects over the near to medium term." Motilal Oswal said that the weak revenue and earnings growth is likely to sustain going forward and hence no re-rating of the stock with a two-year earnings CAGR of nearly 12 percent.