Colgate-Palmolive Company (CL) Intrinsic Value & DCF Valuation
Household & Personal Products · NYSE
Current Price
$93.49
Intrinsic Value
$95.77
+2.4% margin of safety
What Is Colgate-Palmolive Company's Intrinsic Value?
As of 2026-07-29, the base-case DCF model estimates the intrinsic value of Colgate-Palmolive Company (CL) at $95.77 per share, compared with a market price of $93.49, a margin of safety of +2.4%. The base case assumes 5.1% annual free cash flow growth and a 10.0% discount rate.
Across the sensitivity grid the estimate spans $77.53 to $116.75. Intrinsic value is an estimate built on assumptions, not a fact. A higher discount rate or slower growth pushes the estimate down, while stronger cash flow growth lifts it.
How the DCF works · Recalculate with your own assumptions · What is intrinsic value?
Is Colgate-Palmolive Company (CL) Undervalued?
At $93.49, CL trades about 2.4% below the base-case intrinsic value estimate. That is a real discount, but it stays short of the 30% margin of safety required before calling a stock undervalued.
COMPETITIVE MOAT
↑Brand Equity and Loyalty
Colgate's strong brand recognition and consumer trust, built over decades, create significant loyalty. This allows for premium pricing and repeat purchases across its diverse product portfolio.
↑Global Distribution Network
An extensive and entrenched global distribution system provides a significant barrier to entry. This network ensures widespread product availability and efficient market penetration.
↑Economies of Scale
Large-scale manufacturing and procurement operations lead to cost advantages. This efficiency allows Colgate to maintain competitive pricing while preserving healthy profit margins.
INVESTMENT RISKS
↓North America Market Softness
Weakness in the North American market, a significant revenue contributor, could impact overall growth. This softness may stem from economic factors or increased competition.
↓Premium Valuation Concerns
The stock's recent strong performance and premium valuation may limit future upside. Investors might be hesitant to buy at current levels, anticipating a pullback.
↓Input Cost Volatility
Fluctuations in raw material and energy costs can pressure profit margins. Managing these volatile inputs is crucial for maintaining profitability.
Base case
CL base case valuation
Intrinsic Value
$95.77
Margin of safety
+2.4%
Expected annual return
+0.5%
Base case assumptions: 5.1% annual growth, 10.0% discount rate, 20x exit multiple, 5 year projection. Data as of 2026-07-29.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the CL valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for Colgate-Palmolive Company respond.
Open DCF Calculator for CLCompany Overview
Operating globally, Colgate-Palmolive Company and its affiliated entities are engaged in the production and distribution of a diverse range of consumer goods. Its operations are structured into two primary divisions: Oral, Personal and Home Care, and Pet Nutrition. The Oral, Personal and Home Care division encompasses a broad array of offerings, spanning oral hygiene (e.g., toothpastes, toothbrushes, mouthwashes), personal care (e.g., bar and liquid soaps, shower gels, shampoos, conditioners, deodorants, antiperspirants, skin health items), and home care solutions (e.g., dishwashing detergents, fabric conditioners, household cleaners). These products are distributed through various channels, including traditional and online retailers, wholesalers, and distributors, under well-known brand names such as Colgate, Darlie, elmex, hello, meridol, Sorriso, Tom's of Maine, Irish Spring, Palmolive, Protex, Sanex, Softsoap, Lady Speed Stick, Speed Stick, EltaMD, Filorga, PCA SKIN, Ajax, Axion, Fabuloso, Murphy, Suavitel, Soupline, and Cuddly. Furthermore, this segment supplies specialized pharmaceutical products to dentists and other professionals in oral healthcare. Conversely, the Pet Nutrition segment focuses on providing specialized pet food. This includes everyday nutritional options marketed under the Hill's Science Diet brand, as well as therapeutic diets designed to assist in managing various health conditions in dogs and cats, sold under the Hill's Prescription Diet brand. Distribution for these pet nutrition items occurs via pet supply stores, veterinary clinics, and online retail platforms. Established in 1806, Colgate-Palmolive Company maintains its corporate headquarters in New York, New York.
Financial Metrics — CL Stock Valuation Data
Revenue/Share (TTM)
$25.92
FCF/Share (TTM)
$4.70
ROIC (TTM)
30.4%
ROE (TTM)
475.1%
P/FCF
19.9x
EV/EBITDA
20.9x
FCF Yield
5.04%
Debt/Equity
54.99x
On a trailing twelve-month basis, CL generates free cash flow per share of $4.70 alongside a ROIC of 30.4%, both central inputs for a DCF valuation. Its P/FCF ratio of 19.9x and FCF yield of 5.04% then frame how CL is priced against peers on a cash flow basis.
Frequently Asked Questions
What is the intrinsic value of CL?
Colgate-Palmolive Company currently generates $4.70 in free cash flow per share. At the current price of $93.49, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is CL undervalued?
CL trades at a P/FCF ratio of 19.9x with a free cash flow yield of 5.04%. This P/FCF is in a moderate range. However, whether CL is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value CL stock using DCF?
To perform a DCF valuation on Colgate-Palmolive Company: (1) Start with the trailing free cash flow per share ($4.70) as the base, (2) project future FCF growth over 5-10 years based on Household & Personal Products industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting CL's risk profile — with a debt-to-equity of 54.99x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to CL?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Colgate-Palmolive Company, this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Household & Personal Products trends, then discounting those amounts to today's dollars. CL's ROIC of 30.4% reflects how efficiently the company converts invested capital into profit.
How does WACC affect CL stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For CL, with a debt-to-equity ratio of 54.99x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 20.9x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See CL PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Consumer Defensive valuationsDCF and P/E value CL with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-07-29. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.