Balanced Outlook: Procter & Gamble Holds Position Amid Mixed Signals

Callum Elliott, an analyst from Bernstein, maintained the Hold rating on Procter & Gamble (PG – Research Report). The associated price target remains the same with $165.00.

Callum Elliott’s rating is based on a nuanced assessment of Procter & Gamble’s recent financials and market performance. The company reported a mixed earnings report for the third fiscal quarter of 2024, with disappointing top-line growth that was somewhat mitigated by strong gross margins and an unexpectedly low tax rate, leading to earnings per share (EPS) that exceeded expectations. Elliott acknowledges that while there are concerns due to sluggish organic growth and a challenging quarter in China, including a significant decline in the SK-II brand, there are also transient issues such as retail de-stocking that may not have long-term implications.

Elliott has given his Hold rating due to a combination of factors that present both positive and negative outlooks for the company. He notes that Procter & Gamble faces ongoing challenges, such as the potential for increased commodity costs in the following year, which has led to a slight reduction in the fiscal year 2025 EPS estimate. However, he also sees potential for recovery in Chinese markets and a general improvement that could bridge the gap to a more robust growth rate. Despite these mixed signals, Elliott maintains a Market-Perform rating with an unchanged target price of $165, based on a forward price-to-earnings multiple. This assessment suggests that while there are opportunities for Procter & Gamble, there are also significant risks that justify a cautious stance.

Elliott covers the Consumer Defensive sector, focusing on stocks such as Procter & Gamble, Keurig Dr Pepper, and Altria Group. According to TipRanks, Elliott has an average return of 3.8% and a 53.33% success rate on recommended stocks.

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Procter & Gamble (PG) Company Description:

Procter & Gamble Co. manufactures and sells branded consumer packaged goods across five segments: Beauty; Grooming; Health Care; Fabric & Home Care; and Baby, Feminine & Family Care. Some of the popular brands owned by the company include Head & Shoulders, Pantene, Olay, Gillette, Oral-B, Vicks, Ariel, Tide, Pampers, Luvs and Bounty. The company was founded by William Procter and James Gamble in 1837 and is headquartered in Cincinnati, OH.