Colgate-Palmolive Co.
CL,
+0.45%
was upgraded to outperform at Credit Suisse with analysts highlighting 6% growth on a two-year compound annual growth rate (CAGR) basis, twice the rate of the year prior to the pandemic. Shares are down 3% for the year to date with concerns about a category slowdown and commodity headwinds, but analysts say the company is actually on an upward path. The S&P 500 index
SPX,
+0.10%
has gained 12.5% for 2021 so far. "In recent years we have observed notable mega-cap turnarounds, such as P&G and Pepsi Beverages. We think Colgate is next," Credit Suisse wrote, noting that a turnaround is usually preceded by big brand investment. Colgate's advertising spend is heading towards $2 billion annually, or 12% of sales, the highest rate in two decades. "As such, Colgate's sales were accelerating prior to the pandemic and the company is gaining share in more category-country combinations since 2015, including 10 of the top 12 toothpaste markets in 2020," analysts said. And Colgate's pet food company Hill's promises to give the business a boost as pet ownership during COVID soared. Credit Suisse raised its price target to $95 from $80.