McDonald's (MCD - Free Report) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.
Shares of this world's biggest hamburger chain have returned +2.5% over the past month versus the Zacks S&P 500 composite's -1.6% change. The Zacks Retail - Restaurants industry, to which McDonald's belongs, has lost 0.8% over this period. Now the key question is: Where could the stock be headed in the near term?
Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.
Earnings Estimate RevisionsRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.
Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.
For the current quarter, McDonald's is expected to post earnings of $3.34 per share, indicating a change of +4.7% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.4% over the last 30 days.
The consensus earnings estimate of $12.93 for the current fiscal year indicates a year-over-year change of +6%. This estimate has changed -0.2% over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $14.12 indicates a change of +9.2% from what McDonald's is expected to report a year ago. Over the past month, the estimate has changed -0.5%.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, McDonald's is rated Zacks Rank #4 (Sell).
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Projected Revenue GrowthEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
For McDonald's, the consensus sales estimate for the current quarter of $7.15 billion indicates a year-over-year change of +4.5%. For the current and next fiscal years, $28.42 billion and $30.08 billion estimates indicate +5.7% and +5.8% changes, respectively.
Last Reported Results and Surprise HistoryMcDonald's reported revenues of $6.52 billion in the last reported quarter, representing a year-over-year change of +9.4%. EPS of $2.83 for the same period compares with $2.67 a year ago.
Compared to the Zacks Consensus Estimate of $6.49 billion, the reported revenues represent a surprise of +0.49%. The EPS surprise was +3.28%.
Over the last four quarters, McDonald's surpassed consensus EPS estimates three times. The company topped consensus revenue estimates each time over this period.
ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.
Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.
The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an A is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
McDonald's is graded D on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
Bottom LineThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about McDonald's. However, its Zacks Rank #4 does suggest that it may underperform the broader market in the near term.
With the rate environment stabilizing in mid-2026, income investors are circling back to a familiar playbook: own the businesses that have raised payouts through every cycle in living memory. Dividend Kings and Aristocrats with 25-plus years of consecutive hikes offer a growing cash payment backed by durable franchises that the bond market still struggles to match consistently. Three names stand out this June for combining proven dividend track records with reasonable forward multiples and recent earnings momentum.
Here are the three dividend growth stocks worth a close look this month.
This infographic highlights key financial metrics, Q1 2026 performance, and growth outlooks for Johnson & Johnson (JNJ), Coca-Cola (KO), and McDonald’s (MCD). It details why these Dividend Kings and Aristocrats are considered top choices for dividend growth investors in June 2026. Johnson & Johnson (NYSE: JNJ) Johnson & Johnson (NYSE:JNJ | JNJ Price Prediction) is the gold standard of dividend longevity. The healthcare giant just declared its 64th consecutive annual increase, raising the quarterly payout 3% to $1.34 per share, paid on June 9, 2026. That puts JNJ in a club almost no public company can claim membership in.
The fundamentals back the streak. Q1 2026 revenue came in at $24.06 billion, up 10% year over year, beating the $23.61 billion estimate. Management raised full-year guidance to $100.3 billion to $101.3 billion in revenue with adjusted EPS of $11.45 to $11.65. Oncology is doing the heavy lifting: DARZALEX grew 23% to $3.96 billion and TREMFYA jumped 68% to $1.61 billion. CEO Joaquin Duato said the company is “delivering on its promise for a year of accelerated growth and impact.”
Shares are up 16% year to date through June 9, yet the forward multiple sits at just 20x earnings with a 2% yield and an analyst target of $252.87. The caveat: STELARA biosimilar erosion drove sales down 60% to $656 million, and a planned Orthopaedics separation introduces execution risk. The pipeline is broad enough to absorb the hit, but it is a real near-term headwind to monitor.
Coca-Cola (NYSE: KO) Coca-Cola (NYSE:KO) is the other beverage Dividend King in this group, with 63 consecutive years of dividend increases and $8.8 billion paid out to shareholders in 2025. The current quarterly dividend stands at $0.53 per share, with the next ex-dividend date on June 15, 2026.
Q1 2026 was a standout. Revenue hit $12.47 billion, up 12% year over year, with EPS of $0.86 versus $0.81 expected, the fourth straight beat. Global unit case volume rose 3%, led by China, the US, and India, while Coca-Cola Zero Sugar volume grew 13% across all segments. Operating margin expanded to 35% from 33%. Management lifted full-year guidance to 4% to 5% organic revenue growth and 8% to 9% comparable EPS growth, with free cash flow targeted at roughly $12.2 billion.
KO trades at a forward P/E of 24x with a 3% yield, and the stock has run 20% year to date against an analyst target of $86.06. The risk worth flagging: acquisitions and divestitures are a ~4% headwind, and Asia Pacific comparable operating income fell 17%. CEO Henrique Braun framed the quarter as reflecting “our unwavering focus on staying close to the consumer, executing locally and managing complexity.”
McDonald’s (NYSE: MCD) McDonald’s (NYSE:MCD) rounds out the list as the relative value play. The stock is down 6% year to date, trading well below its 200-day moving average of $306.47, even as the burger giant continues a streak of 49-plus consecutive years of dividend increases as a Dividend Aristocrat. The current quarterly dividend of $1.86 reflects a 5% raise from October 2025.
Q1 2026 showed the operating engine reaccelerating. Revenue rose 9% to $6.52 billion, EPS landed at $2.83 versus $2.74 expected, and global comparable sales jumped 4% after going negative a year ago. US comps grew 4%, and loyalty systemwide sales topped $9 billion in the quarter across 70 markets. CEO Chris Kempczinski put it directly: “McDonald’s delivered this quarter. Our 6% global Systemwide sales growth shows how we executed with discipline, proving that we can drive results even in a challenging environment.”
The numbers behind the thesis: a 3% yield, forward P/E of 22x, operating margin in the mid-to-high 40% range, and an analyst price target of $331.29. Roughly 2,600 new restaurants are planned for 2026. The caveat investors should weigh: a negative shareholders’ equity deficit of $1.79 billion, ongoing restructuring charges from Accelerating the Organization continuing through 2027, and tariff/trade exposure on the input side.
Why These Three, Why Now Each of these names cleared the same screen: a multi-decade history of dividend increases, recent earnings momentum confirmed by the most recent quarter, and a forward multiple that does not require heroic assumptions to justify. JNJ and KO offer the dividend longevity premium with current-year tailwinds, while MCD offers the discount entry on a Dividend Aristocrat trading below its 200-day average. For investors seeking proven income compounders as rates stabilize, the bar these three clear is hard to replicate elsewhere in the large-cap universe.
McDonald’s (NYSE:MCD | MCD Price Prediction) is the rare mega-cap where the business is accelerating while the stock sits still. Global comps grew 3.8% last quarter, loyalty sales topped $9 billion in 90 days, and revenue jumped 9.4% YoY. Yet shares are down 5.67% year to date.
I think the disconnect creates an opportunity. The question I want to answer here: can McDonald’s stock realistically hit $375 by 2028? That is the bold target. Here is the math behind it.
Why McDonald’s Shares Are Stuck Despite Strong Fundamentals The stock closed at $284.77 on June 11, well below the 52-week high of $337.56. Performance has been ugly in pockets: down 3.33% over one year and off nearly 5.67% YTD, even after a 4.42% bounce last week.
The reasons are real. CEO Chris Kempczinski acknowledged on the Q1 call that the macro backdrop “is certainly not improving, and it may be getting a little bit worse,” with low-income spending still declining.
Beef inflation, higher interest expense (guided up 4 to 6% in 2026), and ongoing restructuring charges through 2027 are squeezing the narrative. With a beta of just 0.414, MCD is built to grind steadily higher rather than spike.
Wall Street Sees Modest Upside. Here’s What It’s Missing Consensus target sits at $331.29, with 5 Strong Buy, 14 Buy, 14 Hold, and 1 Sell rating. Our model’s base case lands at $322.66 over 12 months, with a bull scenario of $349.85 and a bear case of $298.80. Confidence is 90%, which is high.
My view: analysts are anchoring to near-term beef costs and underrating the loyalty flywheel. TTM loyalty sales already exceed $38 billion across 70 markets. With 56% bullish analyst skew already in place, the upside surprise is operational leverage, not sentiment.
The Path to $375 Per Share Reaching $375 from today’s price of $284.77 would require a gain of 31.7%. With forward EPS of $13.40, a price of $375 implies a forward P/E of 28x. Our base case of $322.66 already implies 23x, meaning the bold target requires roughly 5x of additional multiple expansion.
Is that achievable? I think yes, but only if three things happen. First, the 247Factor adjustment of 1.074 needs to keep expanding as comps stay positive. Second, the “McDonald’s NEXT” strategic repositioning and the ArchIQ AI drive-thru rollout with Google have to start showing margin lift.
Third, the chicken category, which Kempczinski called “bigger than beef globally, and it’s growing 2x faster,” needs to keep taking share. Add the FIFA World Cup 2026 marketing push and a 50,000-restaurant footprint target by 2027, and the EPS denominator does the work. The primary risk is a deeper consumer recession that stalls comps and forces value-driven margin compression.
Where McDonald’s Trades Today vs Its Earnings Power At $284.77, MCD trades at roughly 21x forward earnings, below its trailing P/E of 23 and the forward P/E of 22. Shares sit between a 52-week low of $270.15 and a high of $337.56. Over the past decade, MCD has returned 194.66%, proving the compounding case. For a defensive name throwing off a 2.61% yield and $7.19 billion in annual free cash flow, that multiple looks like value.
$375 Is a Stretch, But Here’s Why It’s Possible Reaching $375 by 2028 requires a 31.7% gain and a forward multiple near 28x. That is a stretch, but not a long shot.
Three things need to go right: loyalty members keep driving systemwide sales above 6%, the chicken and beverage platforms scale internationally, and EPS compounds toward $14 to $15. A consumer recession deeper than today’s pressure would derail it. Returns at this level shouldn’t be expected every year, but we’ve outlined the blueprint for how McDonald’s could reach $375 in 2028.
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The smart money signal on Starbucks (NASDAQ: SBUX | SBUX Price Prediction) is unambiguously bullish, with institutions holding 86.8% of the float and Wall Street’s consensus price target 10.4% above where the stock currently trades. After Brian Niccol’s turnaround delivered its first clean earnings beat in four quarters, analyst coverage has tilted toward conviction, even as retail discussion on Reddit has skewed skeptical.
Hard operational data underpins the institutional thesis. The question for retail investors is whether the gap between current price and consensus target is wide enough to follow the smart money in, or whether the easy money in this recovery has already been made.
Three Data Points Anchoring the Wall Street View First, the analyst consensus, which leans to Hold with a blended target price of $106.25. Wolfe Research upgraded the stock to Outperform with a $112 price target following the Q1 FY2026 results, an early validation of the recovery thesis, since reinforced by the most recent quarter. TD Cowen recently upgraded the shares to Buy and boosted the $106 target to $120.
Second, the operational beat behind that conviction. Q2 FY2026 produced adjusted EPS of $0.50 against a $0.44 consensus, a 13.64% beat, on revenue of $9.531 billion that grew 8.8% year over year. Global comparable store sales rose 6.2%, with North America comps up 7.1% on 4.4% transaction growth. CEO Brian Niccol said, “Our second quarter marked the turn in our turnaround as our Back to Starbucks plan drove both top and bottom line growth.” Management raised FY2026 guidance to 5%+ comp growth and $2.25 to $2.45 in non-GAAP EPS.
Third is the capital-return signal. Starbucks paid its 64th consecutive quarterly dividend at $0.62 per share, compounding at a 17% CAGR. The 2.6% yield anchors the position for the dividend-growth mandates of the largest passive and quasi-passive holders—the BlackRock, Vanguard, and State Street complexes that dominate most S&P 500 13F filings.
The Gap Between Expectations and the Price Shares closed June 1 at $96.51, down 8.9% over the past month and 4.8% over the past week, despite a 14.6% year-to-date gain. That leaves room to run to the $106.25 consensus and meaningful upside to the TD Cowen $120 target. The 50-day moving average of $99.38 is above the spot price, a technical wobble that has coincided with the May pullback.
Retail conviction has not kept pace. Reddit sentiment scores collected through early May ran 28 to 58, weighted toward neutral and bearish, with the most-engaged threads questioning pricing strategy and CEO credibility. One r/stocks post titled “SBUX is pricing like a luxury good when the unit economics say it doesn’t have to” drew sustained engagement across two weeks. Smart money is paying 25x EV/EBITDA and 39x forward earnings for the turnaround. Retail is asking whether the math works.
Competitive pressure is part of why retail is hesitant. Dutch Bros (NYSE: BROS) grew Q1 revenue 30.8% to $464.4 million and has a $76.65 analyst target backed by 23 Buy-or-better ratings. Luckin Coffee operates 33,596 stores with revenue up 35.3% year over year, compressing Starbucks’ China comps to +0.5%.
The Takeaway The smart money has the better dataset here. Three consecutive quarters of accelerating comps, a guidance raise, and an analyst upgrade cycle support the institutional position, and the recent 8.9% monthly drawdown has compressed the entry rather than broken the thesis. The key caveat is an $8.5 billion negative shareholders’ equity and a forward multiple that prices in continued execution. For retail investors weighing whether to follow the institutions, the consensus target should be treated as a directional signal rather than a destination.
SEATTLE--(BUSINESS WIRE)--Starbucks Corporation (NASDAQ: SBUX) today announced that Brian Niccol, chairman and chief executive officer, will participate in a keynote fireside chat at the 6th Annual Evercore Consumer and Retail Conference on Tuesday, June 9th, 2026, at 11:40 a.m. Eastern Time.
The fireside chat will be webcast live from the company’s Investor Relations website at https://investor.starbucks.com on the Events & Presentations page.
About Starbucks
Since 1971, Starbucks Coffee Company has been committed to responsibly sourcing and roasting high-quality arabica coffee. Today, with a global footprint of more than 41,000 company-operated and licensed coffeehouses and a growing presence in consumer-packaged goods, we are the world's premier purveyor of specialty coffee. Through our unwavering commitment to excellence and our guiding principles, we bring the unique Starbucks Experience to life for every customer through every cup. To share in the experience, please visit us in our stores or online at about.starbucks.com or www.starbucks.com.
Starbucks (SBUX - Free Report) has been on a downward spiral lately with significant selling pressure. After declining 9% over the past four weeks, the stock looks well positioned for a trend reversal as it is now in oversold territory and there is strong agreement among Wall Street analysts that the company will report better earnings than they predicted earlier.
We use Relative Strength Index (RSI), one of the most commonly used technical indicators, for spotting whether a stock is oversold. This is a momentum oscillator that measures the speed and change of price movements.
RSI oscillates between zero and 100. Usually, a stock is considered oversold when its RSI reading falls below 30.
Technically, every stock oscillates between being overbought and oversold irrespective of the quality of their fundamentals. And the beauty of RSI is that it helps you quickly and easily check if a stock's price is reaching a point of reversal.
So, by this measure, if a stock has gotten too far below its fair value just because of unwarranted selling pressure, investors may start looking for entry opportunities in the stock for benefiting from the inevitable rebound.
However, like every investing tool, RSI has its limitations, and should not be used alone for making an investment decision.
Here's Why SBUX Could Experience a TurnaroundThe heavy selling of SBUX shares appears to be in the process of exhausting itself, as indicated by its RSI reading of 29.28. So, the trend for the stock could reverse soon for reaching the old equilibrium of supply and demand.
This technical indicator is not the only factor that calls for a potential rebound for the stock. There is a fundamental indicator as well. A strong agreement among sell-side analysts covering SBUX in raising earnings estimates for the current year has led to an increase in the consensus EPS estimate by 0.6% over the last 30 days. And an upward trend in earnings estimate revisions usually translates into price appreciation in the near term.
Moreover, SBUX currently has a Zacks Rank #1 (Strong Buy), which means it is in the top 5% of more than 4,000 stocks that we rank based on trends in earnings estimate revisions and EPS surprises. This is a more conclusive indication of the stock's potential turnaround in the near term. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> .
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Shareholders should contact the firm immediately as there may be limited time to enforce your rights.
, /PRNewswire/ -- Halper Sadeh LLC, an investor rights law firm, is investigating whether certain officers and directors of Starbucks Corporation (NASDAQ: SBUX) breached their fiduciary duties to shareholders.
If you currently own Starbucks stock and are a long-term shareholder, you may be able to seek corporate governance reforms, the return of funds back to the company, a court-approved financial incentive award, or other relief and benefits. Please click here to learn more about your legal rights and options or contact Daniel Sadeh or Zachary Halper at (212) 763-0060 or [email protected] or [email protected].
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Shareholder involvement can help improve a company's policies, practices, and oversight mechanisms to create a more transparent, accountable, and effectively managed organization, which can enhance shareholder value.
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Key Takeaways SBUX's Q2 revenues rose 9% YoY to $9.5B, and EPS climbed 22% to $0.50.SBUX's operating margin rose 110 bps YoY to 9.4%, its first consolidated expansion since Q1 FY24.SBUX targets $2B gross savings through FY28, expects near-term G&A impact and raises FY26 EPS to $2.25-$2.45. Starbucks Corporation (SBUX - Free Report) is placing greater emphasis on cost discipline as it works to convert stronger sales momentum into more durable earnings growth. In the second quarter of fiscal 2026, consolidated revenues rose 9% year over year to $9.5 billion, while global comparable sales increased 6.2%. Operating margin expanded 110 basis points to 9.4%, marking the company’s first consolidated margin expansion since the first quarter of fiscal 2024. SBUX’s fiscal second-quarter earnings per share (EPS) increased 22% year over year to 50 cents, marking its first year-over-year earnings growth in more than two years.
Starbucks’ consolidated margin improved in the fiscal second quarter, but cost pressure remained visible in North America. The segment’s operating margin contracted 170 basis points to 10.2%, reflecting Green Apron Service investments, higher product and distribution costs, tariffs, elevated coffee prices and legal accruals. These pressures were partially offset by progress on operating leverage and cost discipline, underscoring the role of efficiency efforts in supporting margin performance.
Starbucks remains on track with its $2 billion gross cost-savings plan through fiscal 2028, with savings expected across product and distribution costs, operating expenses and G&A. The company expects the near-term savings impact to show most clearly in G&A, with Back to Starbucks investments offsetting much of the realized savings across the P&L.
The pace of savings flow-through remains central to the company’s fiscal 2026 earnings trajectory. Starbucks expects slight year-over-year growth in consolidated operating margin for fiscal 2026, supported by sales leverage, cost-savings initiatives, easing coffee and tariff pressures in the back half of the year and the margin-accretive China JV structure.
With EPS returning to year-over-year growth in the fiscal second quarter and the savings program remaining on track through fiscal 2028, cost discipline is likely to remain a key lever for stronger profit conversion. Reflecting this improved setup, Starbucks raised its fiscal 2026 EPS guidance to $2.25-$2.45 from its prior $2.15-$2.40 range.
How It Stacks Up to CompetitorsDutch Bros Inc. (BROS - Free Report) is managing cost pressure through operating leverage, more disciplined labor deployment and overhead efficiency rather than a formal multiyear savings program. The company improved company-operated labor costs by 120 basis points as a percentage of shop revenues in the first quarter of 2026, supported by better alignment of staffing with customer demand. Efficiency also showed up in corporate overhead, with adjusted SG&A improving 100 basis points as a percentage of revenues. BROS expects about 80 basis points of adjusted SG&A leverage for 2026, although higher coffee costs, food rollout expenses and increased occupancy costs tied to its build-to-suit lease strategy remain margin headwinds.
McDonald’s Corporation (MCD - Free Report) , by comparison, is using scale, supply-chain discipline and ownership optimization to manage margin pressure. The company said its supply-chain teams, supplier partnerships and hedging strategies position it to navigate food, paper and energy inflation in 2026. MCD also acknowledged that U.S. company-operated margins were not acceptable and is reviewing both ownership mix and development returns, including dropping locations that no longer meet return thresholds.
Compared with BROS and MCD, Starbucks’ cost story is more structured and turnaround-driven. BROS is leaning on sales leverage and overhead efficiency, while MCD is using supply-chain scale, disciplined development and ownership optimization. Starbucks, meanwhile, has a defined $2 billion savings plan through fiscal 2028, making cost discipline a more explicit lever in its effort to convert stronger comps into faster EPS growth.
SBUX’s Price Performance, Valuation & EstimatesShares of Starbucks have gained 5.1% in the past year against the industry’s 10.8% decline.
SBUX’s One-Year Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, SBUX trades at a forward price-to-sales (P/S) multiple of 3.21, below the industry’s average of 2.74.
SBUX’s P/S Ratio (Forward 12-Month) vs. Industry
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for SBUX’s fiscal 2026 earnings per share (EPS) implies a year-over-year increase of 12.7%. The EPS estimates for fiscal 2026 have increased in the past 30 days.
EPS Trend of SBUX Stock
Image Source: Zacks Investment Research
SBUX’s Zacks RankSBUX stock currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Starbucks' latest drink launch is a bet on the future of fast food beverages By You're currently following this author! Want to unfollow? Unsubscribe via the link in your email.
Starbucks is aiming to capitalize on social media trends and demand from younger consumers. Starbucks Starbucks isn't just launching another drink. With its latest Refreshers debut, announced Monday, the coffee giant is expanding one of its fastest-growing businesses as it races to win customers long after the morning coffee rush ends.
Beginning July 14, Starbucks customers will be able to order any Refresher drink blended, the latest move in the company's effort to expand what executives describe as a $2 billion beverage platform.
The launch follows April's rollout of customizable Energy Refreshers, which Starbucks executives said recently exceeded expectations and helped drive new customer occasions.
Refreshers, which are iced juice and tea drinks often mixed with fruit pieces, have become one of Starbucks' biggest beverage businesses since launching in 2012, helping drive traffic later in the day as the company looks to expand beyond its traditional morning coffee roots.
"The success of Refreshers reflects an evolution in how customers are engaging with Starbucks, with a growing preference for cold, customizable beverages alongside our core coffee offerings," Dana Pellicano, Starbucks' senior vice president of global product experience, told Business Insider.
Starbucks said Refreshers are helping drive growth in afternoon visits, an area the company has increasingly focused on as it seeks new sources of traffic. It sees customization as a key reason for the platform's success.
The strategy reflects a broader shift underway across the restaurant industry, as chains compete not only with each other but also with energy drinks, functional beverages, and social-media-fueled drink trends for younger consumers' attention and spending.
"Since Refreshers first launched in 2012, we've seen increased interest in drinks that are flavor-forward, visually compelling, and easy to personalize," Pellicano added.
"Chains are no longer just competing with each other for coffee occasions," Noah Pozin, a food, agribusiness, and beverage industry consultant at Truist, told Business Insider. "They are competing with energy drink brands, bottled teas, functional waters, and customized soda concepts for the broader 'cold, caffeinated, customizable treat' occasion."
Chasing younger tastesDutch Bros has expanded its energy-drink offerings, which executives say now account for about 25% of its business. Customized soda chains have also surged in popularity, and restaurant brands from McDonald's to Taco Bell are investing heavily in cold beverages. Analysts at JPMorgan and KeyBanc have pointed to a growing pipeline of innovation from both Starbucks and Dutch Bros as chains race to capture demand for customizable, functional drinks.
Part of what's driving that demand is a shift in how younger consumers think about beverages.
"Gen Z and millennials treat beverages more like personal expression, social content, functional fuel, and affordable indulgence," Pozin said.
Starbucks competitor Dutch Bros says customized energy drinks, such as its Myst Energy Refreshers, now account for roughly 25% of its business. Illustration by Mario Tama/Getty Images As younger consumers navigate persistent inflation, housing affordability challenges, and broader economic uncertainty, beverages have become a relatively accessible luxury, he said. Consumers are increasingly looking for opportunities to experiment, customize, and discover new products without making a major purchase.
That trend has made beverages especially attractive to restaurant operators. Drinks typically carry higher margins than many food offerings and can help drive customer frequency throughout the day, making them an increasingly important growth engine for chains seeking new revenue streams.
Social media has only accelerated the trend.
"One of the biggest insights for us has been just how creative customers are with Refreshers," Pellicano said. "From early on, we saw customers take the core beverages and make them their own — whether that was swapping in coconut milk, which led to the creation of the Pink Drink, or layering in new flavors, textures, and colors."
"What started as customization quickly became culture," she added.
Pellicano said social media has become a "real-time feedback loop and source of inspiration" for Starbucks, helping the company spot emerging drink trends and scale them more quickly.
With blended Refreshers arriving this summer — and additional innovations already in the pipeline — Starbucks is signaling that its future growth won't come solely from coffee.
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Katherine Tangalakis-Lippert is a senior reporter on Business Insider's West Coast team. When she's not writing about trending business and tech news, from the latest supply chain snarls or advancements in AI, she covers the food and restaurant industries, specifically companies such as Starbucks and McDonald's.Some of her prior areas of focus have included coverage of the Supreme Court and emerging technologies such as quantum computing.Katherine has worked on award-nominated projects and has appeared on Good Morning America, NBC, CNN, and other outlets to discuss her reporting.Prior to joining Business Insider, she covered retail, hospitality, and nonprofits at the San Fernando Valley Business Journal and received a master's degree in investigative reporting from the University of Southern California.Reach outDo you have feedback or a story tip? Contact Katherine on Signal at byktl.50, or email her at [email protected] her on Twitter and Instagram @scrawlgirl.Some of her recent scoops, exclusives, and original stories include: Starbucks set up a new office. It's a 5-minute drive from the CEO's California home.Inside Starbucks' crackdown on cup notesEndless Shrimp was Red Lobster's rock bottom. Now it's clawing back.Chipotle's new PAC signals a change in how the company engages in politicsKFC lost its footing in the Chicken Wars. Now it's gunning for a 'Kentucky Fried Comeback.'A few other highlights include: Clarence Thomas raised him 'as a son.' Now he's facing 25-plus years on weapons and drug charges.Call her Ivanka Kushner'Maybe I'll just resign:' Federal workers react to DOGE productivity emailSpaceX launches cause late-night booms that rattle windows, set off car alarms, and may damage property. Locals are pushing back.The US-China tech race is moving from chips to the raw materials they're made of
Starbucks (SBUX) is putting global expansion back in focus, with Chief Executive Officer Brian Niccol saying the coffee chain may still have far more room to gr
Starbucks (SBUX) has received quite a bit of attention from Zacks.com users lately. Therefore, it is wise to be aware of the facts that can impact the stock's prospects.
Cincinnati Financial Corporation reported improved Q1 2026 results, but profitability remains structurally weak with ROE below the cost of equity. CINF's underwriting profitability lags peers, making earnings more exposed to volatile investment income, especially due to its aggressive equity allocation. The stock trades at a premium valuation (1.6x book), which appears stretched given its high single-digit ROE and sector comparisons.
WTW Q1 results reflect solid performance across both segments, growth in the Investments business, an increase in adjusted operating income and expanded margin.
CINCINNATI, Ohio, May 4, 2026 /PRNewswire/ -- Cincinnati Financial Corporation (Nasdaq: CINF) today announced that based on preliminary voting results at the company's annual meeting on May 2, 2026, shareholders elected all directors for one-year terms to the 14-member board. Shareholders also approved the Amended and Restated Articles of Incorporation, the nonbinding resolution to approve the compensation for the company's named executive officers and ratified the selection of Deloitte & Touche LLP as independent registered public accounting firm for 2026.
CINCINNATI, Ohio, May 4, 2026 /PRNewswire/ -- Cincinnati Financial Corporation (Nasdaq: CINF) announced that at its regular meeting on May 2, 2026, the board of directors declared a 94 cents-per-share regular quarterly cash dividend. The dividend is payable July 15, 2026, to shareholders of record as of June 23, 2026.
Taking full advantage of the stock market and investing with confidence are common goals for new and old investors, and Zacks Premium offers many different ways to do both.
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It also includes access to the Zacks Style Scores.
What are the Zacks Style Scores? Developed alongside the Zacks Rank, the Zacks Style Scores are a group of complementary indicators that help investors pick stocks with the best chances of beating the market over the next 30 days.
Each stock is assigned a rating of A, B, C, D, or F based on their value, growth, and momentum characteristics. Just like in school, an A is better than a B, a B is better than a C, and so on -- that means the better the score, the better chance the stock will outperform.
The Style Scores are broken down into four categories:
Value ScoreFor value investors, it's all about finding good stocks at good prices, and discovering which companies are trading under their true value before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to help pick out the most attractive and discounted stocks.
Growth ScoreGrowth investors, on the other hand, are more concerned with a company's financial strength and health, and its future outlook. The Growth Style Score examines things like projected and historic earnings, sales, and cash flow to find stocks that will experience sustainable growth over time.
Momentum ScoreMomentum traders and investors live by the saying "the trend is your friend." This investing style is all about taking advantage of upward or downward trends in a stock's price or earnings outlook. Employing factors like one-week price change and the monthly percentage change in earnings estimates, the Momentum Style Score can indicate favorable times to build a position in high-momentum stocks.
VGM ScoreIf you like to use all three kinds of investing, then the VGM Score is for you. It's a combination of all Style Scores, and is an important indicator to use with the Zacks Rank. The VGM Score rates each stock on their shared weighted styles, narrowing down the companies with the most attractive value, best growth forecast, and most promising momentum.
How Style Scores Work with the Zacks Rank The Zacks Rank, which is a proprietary stock-rating model, employs earnings estimate revisions, or changes to a company's earnings expectations, to make building a winning portfolio easier.
It's highly successful, with #1 (Strong Buy) stocks producing an unmatched +23.7% average annual return since 1988. That's more than double the S&P 500. But because of the large number of stocks we rate, there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.
But it can feel overwhelming to pick the right stocks for you and your investing goals with over 800 top-rated stocks to choose from.
That's where the Style Scores come in.
You want to make sure you're buying stocks with the highest likelihood of success, and to do that, you'll need to pick stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you like a stock that only has a #3 (Hold) rank, it should also have Scores of A or B to guarantee as much upside potential as possible.
The direction of a stock's earnings estimate revisions should always be a key factor when choosing which stocks to buy, since the Scores were created to work together with the Zacks Rank.
A stock with a #4 (Sell) or #5 (Strong Sell) rating, for instance, even one with Scores of A and B, will still have a declining earnings forecast, and a greater chance its share price will fall too.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: Cincinnati Financial (CINF - Free Report) Cincinnati Financial Corporation, formed in 1968 with its headquarters in Fairfield, OH, markets property and casualty insurance. Cincinnati Financial owns three subsidiaries: The Cincinnati Insurance Company, CSU Producer Resources Inc. and CFC Investment Company. In addition, the parent company has an investment portfolio. The Cincinnati Insurance Company owns four additional insurance subsidiaries. The standard market property casualty insurance group includes two of those subsidiaries – The Cincinnati Casualty Company and The Cincinnati Indemnity Company. This group writes a broad range of business, homeowner and auto policies. The Cincinnati Insurance Company also conducts the business of our reinsurance assumed operations, known as Cincinnati Re. Other subsidiaries of The Cincinnati Insurance Company include: The Cincinnati Life Insurance Company providing life insurance policies and fixed annuities and The Cincinnati Specialty Underwriters Insurance Company offering excess and surplus lines insurance products.
CINF is a #3 (Hold) on the Zacks Rank, with a VGM Score of A.
Additionally, the company could be a top pick for growth investors. CINF has a Growth Style Score of B, forecasting year-over-year earnings growth of 8.3% for the current fiscal year.
For fiscal 2026, five analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.14 to $8.61 per share. CINF boasts an average earnings surprise of +27.5%.
With a solid Zacks Rank and top-tier Growth and VGM Style Scores, CINF should be on investors' short list.
Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the dividend as a percent of the current stock price. Many academic studies show that dividends make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Headquartered in Fairfield, Cincinnati Financial (CINF - Free Report) is a Finance stock that has seen a price change of 0.01% so far this year. The insurer is currently shelling out a dividend of $0.94 per share, with a dividend yield of 2.3%. This compares to the Insurance - Property and Casualty industry's yield of 0.77% and the S&P 500's yield of 1.43%.
Looking at dividend growth, the company's current annualized dividend of $3.76 is up 8% from last year. Over the last 5 years, Cincinnati Financial has increased its dividend 5 times on a year-over-year basis for an average annual increase of 8.39%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Cincinnati Financial's current payout ratio is 37%, meaning it paid out 37% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, CINF expects solid earnings growth. The Zacks Consensus Estimate for 2026 is $8.61 per share, which represents a year-over-year growth rate of 8.30%.
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. But, not every company offers a quarterly payout.
Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, CINF is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of #3 (Hold).
Taking full advantage of the stock market and investing with confidence are common goals for new and old investors, and Zacks Premium offers many different ways to do both.
The research service features daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, all of which will help you become a smarter, more confident investor.
Zacks Premium includes access to the Zacks Style Scores as well.
What are the Zacks Style Scores? The Zacks Style Scores, developed alongside the Zacks Rank, are complementary indicators that rate stocks based on three widely-followed investing methodologies; they also help investors pick stocks with the best chances of beating the market over the next 30 days.
Each stock is given an alphabetic rating of A, B, C, D or F based on their value, growth, and momentum qualities. With this system, an A is better than a B, a B is better than a C, and so on, meaning the better the score, the better chance the stock will outperform.
The Style Scores are broken down into four categories:
Value ScoreFor value investors, it's all about finding good stocks at good prices, and discovering which companies are trading under their true value before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to help pick out the most attractive and discounted stocks.
Growth ScoreWhile good value is important, growth investors are more focused on a company's financial strength and health, and its future outlook. The Growth Style Score takes projected and historic earnings, sales, and cash flow into account to uncover stocks that will see long-term, sustainable growth.
Momentum ScoreMomentum trading is all about taking advantage of upward or downward trends in a stock's price or earnings outlook, and these investors live by the saying "the trend is your friend." The Momentum Style Score can pinpoint good times to build a position in a stock, using factors like one-week price change and the monthly percentage change in earnings estimates.
VGM ScoreWhat if you like to use all three types of investing? The VGM Score is a combination of all Style Scores, making it one of the most comprehensive indicators to use with the Zacks Rank. It rates each stock on their combined weighted styles, which helps narrow down the companies with the most attractive value, best growth forecast, and most promising momentum.
How Style Scores Work with the Zacks Rank The Zacks Rank is a proprietary stock-rating model that harnesses the power of earnings estimate revisions, or changes to a company's earnings expectations, to help investors build a successful portfolio.
#1 (Strong Buy) stocks have produced an unmatched +23.7% average annual return since 1988, which is more than double the S&P 500's performance over the same time frame. However, the Zacks Rank examines a ton of stocks, and there can be more than 200 companies with a Strong Buy rank, and another 600 with a #2 (Buy) rank, on any given day.
This totals more than 800 top-rated stocks, and it can be overwhelming to try and pick the best stocks for you and your portfolio.
That's where the Style Scores come in.
To maximize your returns, you want to buy stocks with the highest probability of success. This means picking stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you find yourself looking at stocks with a #3 (Hold) rank, make sure they have Scores of A or B as well to ensure as much upside potential as possible.
The direction of a stock's earnings estimate revisions should always be a key factor when choosing which stocks to buy, since the Scores were created to work together with the Zacks Rank.
A stock with a #4 (Sell) or #5 (Strong Sell) rating, for instance, even one with Scores of A and B, will still have a declining earnings forecast, and a greater chance its share price will fall too.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: Cincinnati Financial (CINF - Free Report) Cincinnati Financial Corporation, formed in 1968 with its headquarters in Fairfield, OH, markets property and casualty insurance. Cincinnati Financial owns three subsidiaries: The Cincinnati Insurance Company, CSU Producer Resources Inc. and CFC Investment Company. In addition, the parent company has an investment portfolio. The Cincinnati Insurance Company owns four additional insurance subsidiaries. The standard market property casualty insurance group includes two of those subsidiaries – The Cincinnati Casualty Company and The Cincinnati Indemnity Company. This group writes a broad range of business, homeowner and auto policies. The Cincinnati Insurance Company also conducts the business of our reinsurance assumed operations, known as Cincinnati Re. Other subsidiaries of The Cincinnati Insurance Company include: The Cincinnati Life Insurance Company providing life insurance policies and fixed annuities and The Cincinnati Specialty Underwriters Insurance Company offering excess and surplus lines insurance products.
CINF is a #3 (Hold) on the Zacks Rank, with a VGM Score of A.
Additionally, the company could be a top pick for growth investors. CINF has a Growth Style Score of B, forecasting year-over-year earnings growth of 8.3% for the current fiscal year.
For fiscal 2026, five analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.14 to $8.61 per share. CINF boasts an average earnings surprise of +27.5%.
With a solid Zacks Rank and top-tier Growth and VGM Style Scores, CINF should be on investors' short list.
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the dividend as a percent of the current stock price. Many academic studies show that dividends make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Cincinnati Financial (CINF - Free Report) is headquartered in Fairfield, and is in the Finance sector. The stock has seen a price change of -0.23% since the start of the year. Currently paying a dividend of $0.94 per share, the company has a dividend yield of 2.31%. In comparison, the Insurance - Property and Casualty industry's yield is 0.76%, while the S&P 500's yield is 1.44%.
Looking at dividend growth, the company's current annualized dividend of $3.76 is up 8% from last year. Over the last 5 years, Cincinnati Financial has increased its dividend 5 times on a year-over-year basis for an average annual increase of 8.39%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Cincinnati Financial's current payout ratio is 37%, meaning it paid out 37% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, CINF expects solid earnings growth. The Zacks Consensus Estimate for 2026 is $8.61 per share, representing a year-over-year earnings growth rate of 8.30%.
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. It's important to keep in mind that not all companies provide a quarterly payout.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, CINF is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of #3 (Hold).
Key Takeaways CINF is growing commercial lines through pricing actions, underwriting discipline and agency ties.Cincinnati Financial continues expanding E&S operations with new business and product additions.CINF has raised dividends for 65 consecutive years despite catastrophe and claims-cost risks. Cincinnati Financial Corporation’s (CINF - Free Report) shares have risen 6.3% in a year, outperforming the industry’s decline of 5.7%, while underperforming the Finance sector and the Zacks S&P 500 index’s growth of 10.6% and 29.3%, respectively.
Strong premium growth, improved pricing and higher net investment income, alongside a sharp reduction in losses and related expenses, increase the confidence of investors. The expected long-term earnings growth is pegged at 5.3%.
Image Source: Zacks Investment Research
Cincinnati Financial has outperformed its peers, including Arch Capital Group Ltd. (ACGL - Free Report) , W.R. Berkley Corporation (WRB - Free Report) and Palomar Holdings, Inc. (PLMR - Free Report) , in a year. Shares of ACGL, WRB and PLMR have lost 7.5%, 10.7% and 37.8%, respectively.
CINF’s Premium ValuationCincinnati Financial’s shares are trading at a premium to the industry. Its price-to-book value of 1.58X is higher than the industry average of 1.34X.
Image Source: Zacks Investment Research
CINF’s Growth Projection EncouragesThe Zacks Consensus Estimate for Cincinnati Financial’s 2026 earnings per share (EPS) is pinned at $8.61, indicating a year-over-year increase of 8.3%. The estimate for 2026 revenues is pegged at $12.05 billion, implying a year-over-year improvement of 7.7%.
The consensus estimate for 2027 EPS and revenues indicates an increase of 4.9% and 6.6%, respectively, from the corresponding 2026 estimates. It has a Growth Score of B.
CINF's Average Target Price Suggests UpsideBased on short-term price targets offered by six analysts, the Zacks average price target is $181.50 per share. The average suggests a potential 14.8% upside from the last closing price.
Image Source: Zacks Investment Research
CINF’s Higher Return on CapitalReturn on equity in the trailing-12 months was 10%, better than the industry average of 6%. This highlights the company’s efficiency in utilizing shareholders’ funds.
Factors Acting in Favor of CINFCincinnati Financial’s Commercial Lines Insurance segment has been consistently witnessing growth over the past several quarters, led by price increases and several growth initiatives. The company leverages its agency-centric model to expand commercial lines through deeper agency relationships, broader product offerings and disciplined underwriting, which is expected to support commercial lines’ profitability.
CINF expects property casualty underwriting results to continue benefiting from price increases and its ongoing initiatives, including the expansion of Cincinnati Re and Cincinnati Global, aimed at improving pricing precision. Management continues to highlight product expansion and selective risk-taking in these operations as part of its long-term strategy to improve income stability.
The Excess and Surplus line has been performing well since its inception in 2008. This segment should continue to benefit from new business-written premiums, higher renewal-written premiums and higher average renewal estimated pricing. Management also points to ongoing product additions in E&S and the ability to place portions of an account there to deepen broader relationships, which can help sustain growth without compromising risk selection, gain market share and diversify earnings.
Cincinnati Financial’s expansion strategy is driven by its exclusive partnerships with local, independent insurance agencies. This relationship-based model fosters strong customer loyalty, high retention rates and consistent business growth. As the insurer expands its agency network into underserved markets, it remains well-positioned to drive sustainable premium growth, deepen market penetration and create long-term shareholder value.
Cincinnati Financial has returned capital to its shareholders through share buybacks, dividend hikes and special dividends. It has an excellent track record of raising dividends for 65 straight years. Cincinnati Financial’s free cash flow conversion has remained more than 150% over the last few quarters, reflecting its solid earnings.
Risks for CINF StockCincinnati Financial’s results remain sensitive to catastrophe activity, particularly in property lines, and severity can vary sharply by period. If elevated catastrophe exposure or loss severity keeps underwriting appetite tight, it could slow long-term diversification benefits from personal lines and reduce operating leverage when rate increases ease.
Management continues to emphasize risk selection and segmentation, but rising loss costs, social inflation, larger jury awards and increasing claim severity could pressure profitability despite conservative reserves.
End NotesStrong performance at the Commercial Lines segment, rate increases, agent-focused business models, consistent cash flow and prudent capital deployment support growth. However, exposure to catastrophe losses and loss-cost trends, including social inflation, can narrow underwriting margins.
Its dividend yield of 2.3% is better than the industry average of 0.3%, making the stock an attractive pick for yield-seeking investors.
Higher return on capital, favorable growth estimates and impressive dividend history should continue to benefit Cincinnati Financial over the long term. A VGM Score of A instils confidence. Given the premium valuation, it is wise to adopt a wait-and-see approach on this Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Colgate-Palmolive Co (CL) Q1 2026 Earnings Call Highlights: Strong Growth Amidst Cost Challenges Colgate-Palmolive Co (CL) reports robust sales growth driven by emerging markets, while navigating cost inflation and competitive pressures. Summary
Organic Sales Growth: Accelerated from the fourth quarter, driven by improved volume performance, particularly in Asia Pacific.Volume and Pricing Growth: Achieved in all four categories and four of five divisions, excluding the impact of private label pet food exit.Emerging Markets Sales Growth: Led by regions where Colgate-Palmolive has higher market shares and scale advantages.Gross Profit, Operating Profit, EPS, and Free Cash Flow: All experienced growth.Annualized Savings Target: $200 million to $300 million, with the majority of savings focused in 2027 and 2028.
Release Date: May 01, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points Colgate-Palmolive Co CL reported strong top and bottom line growth, with organic sales growth accelerating from the previous quarter.Emerging markets led sales growth, with significant contributions from regions like Asia Pacific and Latin America.The company is investing in innovation, data, analytics, digital, and AI to enhance capabilities and drive market share improvement.Colgate-Palmolive Co (CL) announced a strategic growth and productivity program with an annualized savings target of $200 million to $300 million, focusing on 2027 and 2028.The Hill's Pet Nutrition segment showed impressive performance, with solid organic growth and strong execution in innovation and market share gains. Negative Points Significant increases in raw material and packaging costs have led to a reduced expectation for gross margin for the year.North America continues to lag in volume/mix, with interventions in place but requiring time for improvement.The company faces a challenging cost inflation environment, with an additional $300 million impact from raw materials and logistics.Gross margins are expected to be pressured due to higher raw material costs and tariffs, particularly impacting North America.The company is navigating a competitive environment with increased couponing and promotional activities from competitors. Q & A Highlights Q: Noel, can you discuss the volume mix, particularly the strong results in emerging markets in Q1, and the sustainability of this volume strength? Also, what are the plans for North America, which lagged in Q1?
A: Noel Wallace, CEO: We're pleased with the acceleration of volume growth, especially in emerging markets like Asia Pacific. Our interventions in the Hawley & Hazel business are paying off, though the category remains sluggish in China. In North America, we're implementing a strategy reset with brand interventions, innovation, and better execution. We expect improvement as new products and shelf resets take effect.
Q: Can you provide more color on the cost inflation embedded in your guidance, and the assumptions regarding crude oil and potential offsets?
A: Noel Wallace, CEO: We've assumed $300 million in additional raw materials, with oil at around $110. It's crucial for our operating units to plan for this inflationary environment. Stan Sutula, CFO: The $300 million impact is two-thirds raw materials and one-third logistics, with significant increases in oil byproducts and logistics costs. We're offsetting this through RGM productivity and maintaining our earnings guidance.
Q: You maintained your top and bottom line guidance despite gross margin pressures. Can you elaborate on the flexibility you have to deliver on the bottom line?
A: Noel Wallace, CEO: Our guidance reflects increased volatility, but we remain confident in our earnings range. We're committed to offsetting cost pressures through RGM efforts, premium innovation, and productivity initiatives. Stan Sutula, CFO: Our regular productivity program will help drive efficiency across the P&L, impacting both cost and SG&A.
Q: Can you discuss the performance and outlook for the APAC region, particularly India and China?
A: Noel Wallace, CEO: Asia Pacific showed strong growth, driven by China and India. We're seeing improvements in the Hawley & Hazel business and strong execution in omnichannel platforms. The Colgate business in China delivered mid-single-digit growth in a challenging market. Other markets like the Philippines and Thailand also performed well.
Q: How is the Latin America region performing, and do you expect the momentum to continue?
A: Noel Wallace, CEO: Latin America is executing well, with strong growth in Mexico and Brazil. Their omni demand generation and RGM efforts are best-in-class. We're focusing on innovation across all price points, which should drive continued growth. We expect emerging markets to remain a key growth driver.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
Colgate-Palmolive remains a Buy, supported by resilient fundamentals, an attractive and still sustainable dividend yield while they hold the Dividend King status, and prudent valuation amid macro and geopolitical headwinds. CL posted solid Q1 results, with 8.4% net sales growth, robust free cash flow, and reaffirmed 2026 sales and EPS growth guidance despite Iran-driven margin pressures. Rising input and logistics costs, driven by the Iran conflict, are expected to pressure gross margins, but CL's strong cash flows support ongoing shareholder returns.
Colgate-Palmolive (NYSE:CL | CL Price Prediction) stock picked up a fresh price target raise from JPMorgan on Monday, May 4, with the firm lifting its target to $96 from $95 while maintaining its Overweight rating. The thesis is straightforward: a higher share of sales from faster-growing emerging markets positions Colgate to outperform consumer staples peers tilted toward developed markets.
The move follows a strong Q1 2026 print and lands as the defensive trade comes back into favor. For income-oriented investors, this analyst upgrade reinforces Colgate-Palmolive stock as a core staples holding rather than a tactical pick.
Ticker Company Firm Action Old Rating New Rating Old Target New Target CL Colgate-Palmolive JPMorgan Price target raised Overweight Overweight $95 $96 The Analyst’s Case JPMorgan asserts that Colgate-Palmolive is well positioned to continue outperforming its peers thanks to its emerging markets mix. Q1 2026 backed that view, with emerging markets organic sales growth of 6% and 4% volume growth.
Latin America led with net sales up 15% for Colgate-Palmolive, and Asia Pacific delivered the strongest organic growth at 6%. Adjusted EPS of $0.97 beat the $0.94 consensus, marking Colgate-Palmolive’s fourth consecutive EPS beat.
Company Snapshot Colgate-Palmolive is a global consumer staples giant operating in 200+ countries and territories, with brands including Colgate, Palmolive, Speed Stick, Irish Spring, Tom’s of Maine, and Hill’s Science Diet. Global toothpaste share sits at 41%.
The company carries a market cap of roughly $70 billion and is a dividend king with over 60 consecutive years of dividend increases. Colgate-Palmolive CEO Noel Wallace declared, “We delivered a strong start to 2026, with broad-based top and bottom-line growth.”
Why the Move Matters Now Colgate-Palmolive stock trades around $85.80 with a trailing P/E ratio of 33x and a forward P/E ratio of 23x. Shares are up 8% year to date (YTD), reflecting some appetite for defensive names amid AI-driven volatility.
The Colgate-Palmolive stock consensus analyst target sits at $95.53, putting JPMorgan slightly above Street average. Risks remain real: management revised full-year gross margin guidance down citing tariffs, and North America organic sales fell 2%.
What It Means for Your Portfolio For prudent investors, the price target raise reinforces Colgate-Palmolive’s role as a defensive anchor. The bull case rests on emerging markets growth, Hill’s Pet Nutrition (+7% revenue), pricing power, and a yield around 2%. Colgate-Palmolive’s dividend track record remains a key draw for income portfolios.
The bear case centers on foreign exchange (FX) translation risk, slowing staples volumes, tariff-driven margin pressure, and a rich valuation that limits multiple expansion. Should AI infrastructure leadership resume, the defensive trade could rotate out quickly.
Watch for whether Q2 2026 sustains broad-based organic growth across emerging market regions; also look for Hill’s momentum after the Prime100 acquisition, and monitor for FX trajectory. Those signals will determine whether JPMorgan’s incremental bullishness on Colgate-Palmolive stock proves directionally right.
Some companies that are strong investments aren't selling brands and products that I think about daily; they're just there in my everyday life, built into the flow of my day without me noticing. I'll reach for the same products every morning, not because I compared options, but because I've used them for so long it doesn't even feel like a decision anymore.
That quiet, almost invisible, presence is what makes these two consumer staples companies so powerful. They've become part of how people live, not just what they buy. And because of that, their shares are solid decade-long holds.
Image source: Getty Images.
Procter & Gamble owns your morning routine Before most people have made a single conscious decision in the morning, they have already used a Procter & Gamble (PG +0.79%) product -- probably several. The toothbrush next to the sink may be Oral-B. The shampoo might be Pantene or Head & Shoulders. Their deodorant is Old Spice or Secret. The laundry detergent they'll use later is Tide. None of that spending is the result of advertising working in real time. It is the result of years of habit formation that now runs on autopilot.
This is what makes Procter & Gamble something other than just a consumer goods company. It is a behavioral infrastructure company. Its products have become so deeply woven into people's daily routines that switching requires active effort, and most people, under most circumstances, have no reason or desire to make that effort. That psychological stickiness is a moat that no balance sheet can capture.
CFO Andre Schulten said it plainly during the company's most recent earnings call: "Consumers respond well if we give them a truly better proposition in the categories we are in because they see there is upside." That encapsulates my thesis in one sentence. P&G doesn't ask consumers to switch. It asks them to upgrade within brands they already trust -- from standard Tide to Tide Pods, from regular Pampers to Pampers Pure. The margin profile on those higher-tier products is meaningfully better for the company, and consumers make those moves with less psychological resistance because their relationships with the brands are already established.
What gives the next decade its particular shape for P&G is that it is now beginning that same process in earnest across Latin America, Southeast Asia, and Africa. These are markets where growing middle classes are moving from generic products to branded essentials for the first time. Procter & Gamble has done this before: It sold Tide to American households in the 1940s, established Pampers in Western Europe in the 1970s, and entered China in the 1990s.
The playbook is not new, and it has never failed to generate decades of compounding growth. Brand formation like this creates wealth. The honest truth with P&G is that it has grown large enough that its acceleration is structurally limited, and meanwhile, private-label alternatives continue improving to the point where they capture meaningful market share from value-sensitive households. Those are real pressures. But the consumer who buys a store-brand detergent during a tight economic stretch almost always returns to Tide when that stretch ends. That is not loyalty born of convenience. Procter & Gamble has been building that loyalty for 189 years.
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2. Colgate-Palmolive Colgate-Palmolive's (CL +0.07%) Colgate toothpaste is arguably present in more households worldwide than any other single-branded product. More ubiquitous than any fast-food logo, or virtually any technology you can name. In Brazil, India, Mexico, China, the Philippines, and throughout sub-Saharan Africa, Colgate is not one option among several -- it is the toothpaste you use.
Dentists in countries where the company has operated for decades were trained on Colgate clinical materials, learned to recommend Colgate products, and passed those recommendations on to their patients, who passed the habit to their children. The brand has embedded itself into the trusted authority network of oral health in a way that no competitor can replicate with a marketing budget -- because the trust was built not through advertising, but through professional endorsement over generations.
CEO Noel Wallace said during the company's most recent earnings call that growth was "led by emerging markets," where its brands hold the highest market share and the greatest scale advantages. The reason is not pricing or distribution alone -- it is that Colgate arrived in those markets early, built trust in communities where dental health awareness was just emerging, and became the default. That default status, once earned, is nearly permanent.
Morgan Stanley named Colgate-Palmolive its top consumer sector pick for 2026. The company also gained global toothpaste market share in the first quarter of 2026 -- a category where it already leads -- a result that suggests the brand is not defending old ground, but actively expanding.
Colgate-Palmolive delivered 8% sales growth in Q1 2026, but EPS declined 6%, warranting a conservative hold rating. I see organic growth of just 2.9%, with North America sales falling due to increased toothpaste competition and margin compression. FX tailwinds drove significant growth in Latin America, EMEA, and APAC, raising concerns about sustainability if currency trends reverse.
Investors interested in stocks from the Consumer Products - Staples sector have probably already heard of Ollie's Bargain Outlet (OLLI - Free Report) and Colgate-Palmolive (CL - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, Ollie's Bargain Outlet is sporting a Zacks Rank of #2 (Buy), while Colgate-Palmolive has a Zacks Rank of #4 (Sell). Investors should feel comfortable knowing that OLLI likely has seen a stronger improvement to its earnings outlook than CL has recently. However, value investors will care about much more than just this.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
OLLI currently has a forward P/E ratio of 16.78, while CL has a forward P/E of 22.83. We also note that OLLI has a PEG ratio of 1.32. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. CL currently has a PEG ratio of 4.53.
Another notable valuation metric for OLLI is its P/B ratio of 2.44. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, CL has a P/B of 144.35.
These are just a few of the metrics contributing to OLLI's Value grade of B and CL's Value grade of D.
OLLI has seen stronger estimate revision activity and sports more attractive valuation metrics than CL, so it seems like value investors will conclude that OLLI is the superior option right now.
CL's innovation strategy is driving market share gains as premium launches, pricing and science-based products support growth across oral care and pet nutrition.
NEW YORK--(BUSINESS WIRE)--Colgate-Palmolive (NYSE:CL) Chief Operating Officer, Americas, Shane Grant and Executive Vice President, M&A and Special Projects, John Faucher will participate in a fireside chat at the dbAccess Global Consumer Conference in Paris on Wednesday, June 3, 2026 at 8:45 am ET.
Investors may access a live webcast of this fireside chat on Colgate’s website at www.colgatepalmolive.com. For those unable to participate during the live webcast, a recorded version of the webcast will be made available through the Investor Center section of Colgate’s website.
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Colgate-Palmolive Company is a caring, innovative growth company that is reimagining a healthier future for all people, their pets and our planet. Focused on Oral Care, Personal Care, Home Care and Pet Nutrition, we sell our products in more than 200 countries and territories under brands such as Colgate, Palmolive, Ajax, Axion, Darlie, elmex, EltaMD, Fabuloso, Filorga, hello, Hill’s Prescription Diet, Hill’s Science Diet, Irish Spring, Lady Speed Stick, meridol, PCA SKIN, Prime100, Protex, Sanex, Softsoap, Sorriso, Soupline, Speed Stick, Suavitel and Tom’s of Maine. We are recognized for our leadership and innovation in promoting sustainability and community wellbeing, including our achievements in decreasing plastic waste and promoting recyclability, saving water and improving children’s oral health through our Colgate Bright Smiles, Bright Futures program, which has reached approximately two billion children and their families since 1991. For more information about Colgate-Palmolive and how we make more smiles, visit www.colgatepalmolive.com. CL-C
If you are looking for reliable dividend growth in consumer staples, your search should rarely be about headline yield. Your search should focus on the kind of steady, compounding cash flow that can endure across entire economic cycles.
Five names stand out right now, and they cover the full range of how a consumer goods dividend can compound over decades.
Image source: Getty Images.
1. Coca-Cola The Coca-Cola Company (KO +0.11%) approved its 64th consecutive annual dividend increase in February, lifting the annual payout to $2.12 per share from $2.04. The reason this dividend has held up for more than six decades is structural. Coca-Cola sells syrup concentrate to a global network of independent bottlers, which produces high gross margins, low capital intensity, and pricing power even when consumer demand softens.
The 2025 to 2026 stretch has also been one of the better periods for revenue per case, as international pricing has held up, and the company has continued to invest in away-from-home channels.
The honest risk with Coca-Cola is that its volume growth in developed markets is modest, and weight-loss drugs are starting to influence beverage consumption at the margin. Neither factor has really shown up in the numbers, but both deserve to be monitored.
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2. Procter & Gamble Procter & Gamble (PG +0.79%) declared its 69th consecutive annual dividend increase in April. The payout is supported by a portfolio of category-leading brands across laundry, personal care, beauty, baby, and grooming, and by some of the most predictable free cash flow in the consumer staples universe. P&G's dividend has been paid for more than 130 years, which is genuinely unusual.
The dividend appeal is its consistency. P&G generates enough free cash flow to cover the dividend, fund buybacks, and reinvest in product development, all in the same year, every year.
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3. Colgate-Palmolive Colgate-Palmolive Company (CL +0.07%) raised its quarterly dividend in March, continuing one of the longer payout-growth streaks in consumer staples. The reason this stock works for dividend-focused investors is that toothpaste and oral care are among the most recession-resistant consumer goods, and Colgate's emerging-market exposure provides volume growth that mature U.S. competitors do not.
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4. McDonald's McDonald's Corporation (MCD +0.01%) currently yields about 2.7%, with a long history of annual dividend increases and a payout supported by a franchise model that generates substantial royalty-based cash flow. The reason the dividend is so reliable is the structure. McDonald's collects rent and royalties from franchisees rather than running most stores itself, which makes the income stream look more like a real estate and royalty business than a restaurant business.
The risk worth naming is value perception. McDonald's has been in a multi-quarter rebuild of its value menu, and traffic among lower-income U.S. consumers has been pressured. The payout itself is well covered, but earnings growth depends on how the value rebuild progresses.
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5. Walmart Walmart (WMT +0.44%) extended its dividend-growth streak to 53 years in February, with the quarterly payout rising to $0.248 per share. The yield is modest, but the dividend growth profile and the underlying business are what make this work. Walmart's advertising business is generating roughly $6.4 billion in revenue, and the membership program (Walmart Plus) is scaling. Adjusted operating income grew 10.8% in the fourth quarter, while revenue grew 5.6%, indicating real operating leverage.
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How to think about the mix These five names aren't the highest-yielding consumer goods stocks, and that's my point. What each ticker offers instead is consistency. Each one has strong payout coverage, a long history of dividend growth, and the kind of stability that lets income investors actually plan around the cash flow for decades.
A common trap in dividend investing is getting distracted by headline yield. A 6% yield can look attractive until the payout gets cut. Meanwhile, a steady 2% yield from a long-established Dividend King that grows its dividend 6% to 8% a year can quietly compound into a far larger income stream over time. A Dividend King is a company that's grown its dividend payment for at least 50 consecutive years.
That's the profile these companies tend to fit. Each represents a different angle on the same core idea: durable cash generation, dominant market positions, and a long record of raising dividends across multiple cycles. Put together thoughtfully and held with patience, they're less about chasing today's income and more about building a dividend stream that grows steadily year after year.
Key Takeaways CL posts broad-based volume and pricing growth across most divisions and categories.Colgate sees strong momentum in the Asia Pacific and Latin America markets.CL continues using innovation-led pricing to support margins and consumer value. Colgate-Palmolive Company (CL - Free Report) is striving for a balance between volume and pricing, rather than relying solely on price increases to drive revenues. In the first quarter of fiscal 2026, the company highlighted that it witnessed improved volume performance, particularly within the Asia Pacific region. Excluding the impact from the private label pet food exit, the company achieved both volume and pricing growth across all four categories and in four of its five operating divisions, reflecting broad-based business momentum.
The company stated that industry-wide category volumes remain relatively sluggish globally, making the recent acceleration in volume growth particularly encouraging. Management highlighted that volume improvement compared with the fourth quarter of fiscal 2025 was broad-based, with growth observed across nearly all divisions and categories in the first quarter of fiscal 2026. This trend was strongest in emerging markets, which the company views as a primary growth engine. Management noted that the Asia Pacific region was a significant contributor to accelerating growth trends, while Latin America continued delivering solid volume performance and market share gains.
However, pricing remains a critical lever navigating the inflationary environment and maintaining pricing power remains a key priority across the business. Management highlighted that pricing actions continue to be important for protecting margin dollars and supporting category investment. The company also emphasized that future pricing initiatives will increasingly be supported by innovation and strong value propositions across multiple price points. Management expects innovation-led pricing opportunities to continue through the remainder of the year as it focuses on balancing pricing strategy with consumer value.
Overall, Colgate appears increasingly balanced between pricing and volume growth, with emerging market momentum, innovation-led demand and pricing discipline supporting sustainable revenue growth and margin protection.
Zacks Rundown for CLColgate’s shares have gained 11.7% in the past six months against the industry’s decline of 4.5%.
Image Source: Zacks Investment Research
From a valuation standpoint, CL trades at a forward price-to-earnings ratio of 23X, higher than the industry’s average of 17.68X. CL currently carries a Zacks Rank #4 (Sell).
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for CL’s 2026 and 2027 earnings implies year-over-year growth of 3.5% and 5.6%, respectively.
Image Source: Zacks Investment Research
Stocks to ConsiderSome better-ranked stocks have been discussed below:
ARKO Corp. (ARKO - Free Report) operates a chain of convenience stores in the United States. ARKO currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for ARKO's current fiscal-year sales implies a decline of 2.8%, while the same for current fiscal-year earnings implies growth of 93.3% from the year-ago reported figures. ARKO delivered a trailing four-quarter earnings surprise of 43.2%, on average.
Kenvue Inc. (KVUE - Free Report) operates as a consumer health company in the United States, the rest of North America, Europe, the Middle East, Africa, the Asia-Pacific and Latin America. KVUE currently sports a Zacks Rank #1.
The Zacks Consensus Estimate for KVUE's current fiscal-year sales and earnings implies growth of 3.2% and 7.4%, respectively, from the year-ago actuals. KVUE delivered a trailing four-quarter negative earnings surprise of 12.1%, on average.
Krispy Kreme, Inc. (DNUT - Free Report) produces doughnuts in the United States, the United Kingdom, Ireland, Australia, New Zealand, Mexico, Canada, Japan, and internationally. At present, DNUT Carries a Zacks Rank of 2 (Buy).
The Zacks Consensus Estimate for DNUT’s current fiscal-year sales implies a decline of 14%, and the same for earnings implies growth of 80% from the year-ago reported figures. DNUT delivered a trailing four-quarter negative earnings surprise of 6.3%, on average.
NEW YORK--(BUSINESS WIRE)--Colgate-Palmolive, a global leader in health and hygiene, today announced the launch of Serving Smiles, a new video-first podcast designed to tackle health misinformation and simplify wellness for Gen Z. Hosted by actor, singer and content creator Pressley Hosbach and award-winning advocate, actor and podcaster Madison Tevlin, the series brings expert-backed clarity to a generation overwhelmed by wellness trends and conflicting health advice that can be found on socia.
NYSE issues a pre-market daily advisory direct from the trading floor. NEW YORK, June 8, 2026 /PRNewswire/ -- The New York Stock Exchange (NYSE) provides a daily pre-market update directly from the NYSE Trading Floor.
Colgate-Palmolive delivered solid Q1 results with 8.4% revenue growth and strong performance outside North America. CL's North American segment continues to underperform, with a 28% decline in operating profit and ongoing margin pressure from tariffs and freight costs. The SGPP productivity program is being expanded, targeting $200m–$300m in annual pretax savings by 2028 through supply chain and operational optimizations.
NEW YORK--(BUSINESS WIRE)--The Board of Directors of Colgate-Palmolive Company (NYSE:CL) today declared a quarterly cash dividend of $0.53 per common share, payable on August 14, 2026, to shareholders of record on July 20, 2026. The Company has paid uninterrupted dividends on its common stock since 1895. * * * Colgate-Palmolive Company is a caring, innovative growth company that is reimagining a healthier future for all people, their pets and our planet. Focused on Oral Care, Personal Care, Hom.
NORWALK, Conn.--(BUSINESS WIRE)--Xerox Holdings Corporation (NASDAQ: XRX) today announced that Steve Bandrowczak will step down as Chief Executive Officer, and the Board of Directors has appointed Louie Pastor as Chief Executive Officer, effective immediately. “On behalf of the Board and the entire Xerox team, I want to thank Steve for his leadership during a pivotal period for the company, including the successful acquisitions and integrations of Lexmark and ITsavvy,” said Scott Letier, Chairm.
