Colgate-Palmolive Company (CL) Intrinsic Value & DCF Valuation
Household & Personal Products · NYSE
Current Price
$89.45
Intrinsic Value
$94.33
+5.2% margin of safety
What Is Colgate-Palmolive Company's Intrinsic Value?
As of 2026-06-12, our base-case DCF model estimates the intrinsic value of Colgate-Palmolive Company (CL) at $94.33 per share, compared with a market price of $89.45, a margin of safety of +5.2%. The base case assumes 5.7% annual free cash flow growth and a 10.0% discount rate.
Across the sensitivity grid the estimate spans $75.98 to $115.45. 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 our DCF works · Recalculate with your own assumptions · What is intrinsic value?
Is Colgate-Palmolive Company (CL) Undervalued?
At $89.45, CL trades about 5.2% below our base-case intrinsic value estimate. That is a real discount, but it stays short of the 30% margin of safety we require before calling a stock undervalued.
COMPETITIVE MOAT
↑Brand Loyalty and Trust
Colgate's long-standing reputation for oral care and household products fosters deep consumer trust. This loyalty translates into consistent demand, even in challenging economic times.
↑Global Distribution Network
The company possesses an extensive and efficient global distribution system. This allows them to reach diverse markets and maintain shelf presence for their wide product portfolio.
↑Innovation and Product Development
Colgate consistently invests in research and development to launch new and improved products. Initiatives like the 'Serving Smiles' podcast show a focus on engaging new demographics.
INVESTMENT RISKS
↓Intense Competition
The household and personal products industry is highly competitive with numerous global and local players. This can pressure pricing and market share.
↓Reliance on Pricing for Growth
While balancing pricing and volume, an over-reliance on price increases could alienate price-sensitive consumers. This strategy may not be sustainable long-term.
↓Shifting Consumer Preferences
Evolving consumer tastes towards natural or sustainable products could challenge established brands. Adapting to these shifts requires significant investment and agility.
Base case
CL base case valuation
Intrinsic Value
$94.33
Margin of safety
+5.2%
Expected annual return
+1.1%
Base case assumptions: 5.7% annual growth, 10.0% discount rate, 19x exit multiple, 5 year projection. Data as of 2026-06-12.
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
19.0x
EV/EBITDA
21.1x
FCF Yield
5.26%
Debt/Equity
54.99x
Based on trailing twelve-month data, CL shows a free cash flow per share of $4.70 and a ROIC of 30.4%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 19.0x and FCF yield of 5.26% are important context metrics when evaluating CL's stock valuation relative to peers.
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 $89.45, 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 19.0x with a free cash flow yield of 5.26%. 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% indicates strong capital efficiency, which supports higher growth assumptions in the DCF model.
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 21.1x, 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 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.