Colgate-Palmolive Reports Solid 3Q, Year-End Estimates Raised

Jefferies & Co. has published a research report on Colgate-Palmolive CL after the company reported an upside to 3Q EPS that flows through to FY2010 estimates, but calls for some reduction in 2011. In the report, Jefferies writes "We are raising our 2010E ongoing EPS estimate from $4.60 to $4.69, essentially flowing through the upside generated in the 3Q v. our forecast. This implies a +7.4% year-over-year increase in ongoing EPS, which is below management's outlook for double-digit growth. However, we note that management and consensus contemplate a 2010 1Q EPS number of $1.21, while we believe actual ongoing EPS in the 1Q was $1.10. Our 2010E sales forecast is $15.6 bil, up +1.9%, below consensus +2.5%, and below our previous +2.3% forecast. Our 2011E goes from $5.10 to $5.05, up +7.7% vs. 2010E, which is in line with mgt's initial internal forecast for mid-single-digit EPS growth considering that we are contemplating a lower 2010E ongoing EPS base. Our previous forecast implied +10.8% growth." Jefferies maintains its Hold rating and $85 price target. Colgate-Palmolive closed Friday at $77.12.