Colgate-Palmolive enters its May 1 Q1 earnings call with a quieter setup than the turbulence of early April might have suggested: shorts are cutting positions at a sharp pace, the options market has dialled back its defensive tilt, and a cluster of Street names still hold positive ratings despite shaving price targets. The key question heading into the print is whether a company trading at a premium to its own history can reassert volume growth as the Hill's headwind and tariff pressures bear down.
The most notable shift this week is in short positioning. Short interest dropped roughly 14% over the past five days to around 2.4% of free float — a meaningful retreat from the 22.5 million shares that were short in mid-April. That pullback coincides with the stock's own 4.7% weekly gain to $85.67. The borrow market confirms the retreat is orderly rather than forced: cost to borrow is a modest 0.49%, and while that is up around 45% from a month ago, the absolute level remains negligible. Availability is running at a very wide 9,700%-plus relative to outstanding short interest, meaning there is no constraint on either side of the trade and no squeeze dynamic at work.
Options positioning has shifted in the same direction. The put/call ratio has dropped to just above parity at 1.00, well below its 20-day average of 1.26 — nearly 1.6 standard deviations lighter on downside protection than recent norms. That marks one of the less defensive options readings of the past year; for comparison, the ratio spent most of March and early April above 1.39. Investors were clearly hedging aggressively through the tariff-shock period and have now unwound a substantial chunk of that protection. The timing, right ahead of earnings, is worth noting.
The Street is broadly constructive but in trimming mode. Morgan Stanley maintained its Overweight while cutting its target from $100 to $95, and JPMorgan did likewise — shaving its Overweight target from $97 to $95 on April 17. Both moves reflect cost-headwind caution rather than a change in direction. Rothschild upgraded to Buy on April 21, lifting its target to $100. Barclays, at Equal-Weight, cut hardest — its target now sits at $79, a full $7 below the current price. Bank of America holds at Buy with a $102 target. The mean Street target is $95.37, implying roughly 11% upside from current levels, though that gap has narrowed with the recent rally. The ORTEX short score of 33.4 sits in the lower half of the universe, consistent with limited short conviction. The dividend score ranks in the 98th percentile — CL's income credentials are near-unmatched — while EPS momentum over 30 days is a softer 26th percentile, reflecting the near-term earnings uncertainty the bears are leaning on.
The bull/bear debate hinges on two opposing truths. Bulls point to Colgate's sustained advertising commitment — ad spend has risen from 11.6% of sales in 2021 to 13.5% in 2024 — and to the structural growth story in emerging markets, which account for roughly 70% of revenue. Bears counter with real data: gross margin contracted 75 basis points year-on-year in Q2 2025, volumes were negative in Q1 and Q2 2025 despite price increases, and Hill's measured retail declines deepened through the third quarter. Those trends frame what the May 1 print will be scrutinised for. RBC flagged this week that it expects an in-line Q1 with guidance reaffirmed despite cost headwinds — a scenario that would likely confirm the stability thesis without resolving the volume question. The last earnings release in January delivered a 7.8% single-day gain and a 10.8% five-day move, so the market has shown it can react sharply when results surprise.
The immediate focus is how management frames the tariff impact and whether Hill's shows any stabilisation in volumes — those two data points will determine whether the recent short-covering and options-unwinding prove well-timed or premature.
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