UPDATE: BMO Capital Markets Reiterates Market Perform Rating, Raises PT on Colgate-Palmolive Company Following 2013 CAGNY

In a report published Monday, BMO Capital Markets reiterated its Market Perform rating on Colgate-Palmolive Company CL, and raised its price target from $102.00 to $109.00. BMO Capital Markets noted, “At CAGNY, CL mentioned it expects organic sales growth of 6%-7% and gross margin expansion of 30-70 bp including the negative impact from the devaluation of the bolivar (of 32%) in Venezuela. The operating environment in Venezuela is difficult (though Colgate reports its share of the toothpaste market is 97.6%), but CL thinks it will recover, though it would not comment on the impact of a potential second devaluation. (On February 11, CL indicated Venezuela would clip EPS by $0.20-$0.28.) Organic sales growth of 6%-7% in 2013 should be driven by innovation, growth in emerging markets, and a turnaround in the Hill's business to positive volume growth, while cost savings and a benign commodity environment should lead to gross margin expansion of 30-70 bp.” Colgate-Palmolive Company closed on Friday at $113.97.
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