CL - Colgate-Palmolive upgraded named top pick at Morgan Stanley

Colgate-Palmolive Company ( NYSE: CL )  shares rose on Monday after Morgan Stanley named it a top pick in household products.

Equity analyst Dara Mohsenian advised clients that the stock’s approximately 10% pullback to start 2023 has created an opportunity for investors with a beatable sales guide in 2023 and promising opportunities in segments like the pet business. Additionally, its pricing power, with hikes outpacing Procter & Gamble ( PG ) and Kimberly-Clark Corporation ( KMB ), is underappreciated in his view.

“With higher pricing and weaker consumer spending, trade-down risk is building for

HPC companies, but we actually see trade-down as a modest positive for CL, in direct

contrast to most CPG peers,” Mohsenian wrote. “Based on US scanner data, CL's products are at a -17% discount to its product categories as shown below, in direct contrast to large premiums at most peers except [Church & Dwight] ( CHD ).”

Mohsenian moved his rating on Colgate-Palmolive to Overweight from a prior Buy and assigned it top pick status. An $82 price target was set for the stock.

Shares of Colgate-Palmolive ( CL ) rose 1.02% in premarket trading.

Read more on the company’s latest earnings release .

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