S&P views Colgate-Palmolive negatively

S&P said it changed its outlook for Colgate-Palmolive Co. to negative from stable because its multiyear historic profit trend has in the agency’s opinion been at the low end compared to its peers. The agency also affirmed Colgate-Palmolive’s AA- rating.

“The company's executive management team including the CEO who was appointed in 2019 has successfully driven top-line growth after a weak performance in the preceding years. However, except for the peak pandemic period when demand was strong and inflation in check, S&P Global Ratings-adjusted EBITDA has been about flat, while the margin fell to 24.2% in 2022 from 29% in 2017. The company's non-GAAP operating profit performance paints a similar picture,” S&P said in a press release.

S&P warned there is the potential for a downgrade over the next 12 to 18 months if Colgate-Palmolive cannot grow market share or consistently increase adjusted EBITDA while strengthening margins to levels that are visibly above larger and more diverse rating peers.

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