TD Cowen downgraded Colgate-Palmolive Company (NYSE: CL) to Hold from Buy and lowered its price target to $85 from $96, with shares declining around 1% in pre-market trading Tuesday.
The firm reduced its earnings estimates to reflect increased inflationary pressures expected between the third quarter of 2026 and the second quarter of 2027. These pressures are primarily driven by higher costs for oil-based inputs such as resins, as well as rising tallow prices, which have increased approximately 40% year over year on the Chicago Mercantile Exchange.
TD Cowen now expects 2026 EPS growth of 4.0%, below the consensus estimate of 5% and company guidance of low- to mid-single-digit growth excluding foreign exchange impacts. For 2027, the firm forecasts EPS growth of 4.5%, compared to the consensus expectation of 7%.
While investors generally view Colgate’s strong presence in emerging markets as providing pricing power to offset inflation, TD Cowen noted that a 13% downward revision in consensus EPS during 2022 suggests that this resilience may be overstated.
The firm also indicated that the company’s U.S. segment may require additional investment to drive sales improvement, following weak performance in 2025 and a slow start to 2026.
