Colgate-Palmolive Stock Slips Below 50-Day SMA: Time to Be Cautious?

SMA is an essential tool in technical analysis that helps investors evaluate price trends by smoothing out short-term fluctuations. This approach also provides a clearer perspective on a stock's long-term direction.

CL Stock Trades Below 50 Day SMAs

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CL has delivered a lackluster performance, with its shares declining 3.8% in the past six months compared with the Zacks Consumer Products – Staples industry’s 5% fall. However, the stock has outperformed the broader Zacks Consumer Staples sector, which fell 10.2%, while underperforming the S&P 500’s 11.8% gain over the same period.

CL’s Six-Month Price Performance

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At its current price of $91.46, CL stock trades 22.7% above its 52-week low of $74.55 and roughly 7.9% below its 52-week high of $99.33.

The recent technical weakness comes despite a solid second-quarter 2026 performance. Colgate-Palmolive reported net sales of $5.36 billion, up 4.9% year over year, while organic sales advanced 2.4%. Base Business earnings increased 8% to 99 cents per share. The company also delivered strong gross-margin performance and continued to increase advertising investments behind its brands.

Nevertheless, several near-term challenges appear to be keeping investors cautious.

Here's Why CL Stock Faces Near-Term Pressure

The biggest concern remains the North American business. Management expressed disappointment with the second-quarter performance in the region amid softer category demand, heightened competitive activity and inventory reductions by major retailers. The company also identified selective pricing gaps versus competitors and plans to address them while stepping up advertising and premium innovation during the second half.

North America net sales and organic sales declined 3% in the second quarter, with a 3.9% volume decline more than offsetting a 0.9% increase in pricing. This weakness contrasts with stronger results in several international markets and remains an important hurdle for Colgate as it attempts to improve its U.S. trajectory.

Consumer uncertainty is another concern. Management highlighted significant month-to-month volatility in category trends, noting that elevated gasoline prices and weaker consumer confidence have made shoppers more cautious. Although U.S. category trends improved after a particularly weak May, they remained below historical levels.

Cost pressures could also intensify in the second half. Colgate expects raw-material costs and tariffs to be higher in the back half than in the second quarter. Even so, strong revenue growth management, pricing, productivity and favorable mix allowed the company to raise its full-year gross-margin outlook to roughly flat from its prior expectation for a decline.

Hill’s Pet Nutrition also faces a softer category backdrop. Excluding the private-label exit, Hill’s delivered roughly 4% organic growth, but the exit created an approximately 200-basis-point drag on volume. Management believes the pet category may be near a bottom, though inflation could continue to pressure demand.

Still, Colgate-Palmolive's international operations provide an important cushion. Emerging markets led second-quarter growth, with strength in India, Brazil, Mexico and China, while Europe continued to benefit from innovation, premiumization and market-share gains.

Here’s How Estimates Are Shaping for CL

The Zacks Consensus Estimate for Colgate-Palmolive’s earnings per share (EPS) for the current and upcoming fiscal years has been revised upward over the past 30 days. For fiscal 2026 and 2027, EPS estimates have moved upward by 1.3% and 0.5% to $3.86 and $4.07, respectively.

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CL’s Valuation Picture

Valuation remains another factor investors should consider. CL currently trades at a forward 12-month P/E ratio of about 22.92X, above the Zacks Consumer Products - Staples industry average of 18.12X. The premium valuation suggests that investors are already assigning considerable value to Colgate-Palmolive’s strong brands, global footprint, margin execution and long-term growth prospects.

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The premium becomes more important in the context of the stock’s recent technical weakness. While Colgate-Palmolive continues to deliver healthy profitability and international growth, persistent U.S. pressure, elevated promotional competition and rising input costs could limit near-term upside if operating trends fail to improve sufficiently.

Should You Buy CL Stock After the SMA Breach?

Colgate-Palmolive has several fundamental strengths, including its dominant global oral-care franchise, emerging-market momentum, improving gross-margin execution, strong cash generation and continued investments in premium innovation and brand support.

However, the drop below the 50-day SMA points to weakening short-term momentum. U.S. category softness, retailer inventory reductions, heightened competitive activity and rising raw-material and tariff costs could continue to create volatility. Meanwhile, CL's premium valuation leaves less room for execution setbacks.

Given the mixed technical picture and balanced fundamental outlook, investors may prefer to wait for a more decisive move back above the 50-day SMA before becoming more constructive on the stock. Existing investors may continue to hold their positions, particularly while CL remains above its 200-day moving average.

Colgate-Palmolive currently carries a Zacks Rank #3 (Hold). 

Stocks to Consider

Darling Ingredients Inc. DAR develops, produces and sells sustainable natural ingredients from edible and inedible bio-nutrients. At present, Darling Ingredients sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus estimate for Darling Ingredients’ current fiscal-year sales and earnings implies growth of 12.8% and 926.5%, respectively, from the year-ago figures. DAR delivered a trailing four-quarter earnings surprise of 38.9%, on average.

The J. M. Smucker Company SJM , which manufactures and markets branded food and beverage products, carries a Zacks Rank #2 (Buy) at present. SJM delivered a trailing four-quarter earnings surprise of 1.5%, on average.

The Zacks Consensus Estimate for J. M. Smucker’s current fiscal-year earnings indicates growth of 8.9% from the year-ago figures.

US Foods Holding Corp. USFD engages in the marketing, sale and distribution of fresh, frozen and dry food and non-food products to foodservice customers in the United States. It currently carries a Zacks Rank of 2. USFD delivered a trailing four-quarter earnings surprise of 1.5%, on average.

The Zacks Consensus Estimate for US Foods Holding’s current fiscal-year sales and earnings implies growth of 5.3% and 16.3%, respectively, from the year-ago figures.

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This article originally published on Zacks Investment Research (zacks.com).

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