Analysts positive following first Procter & Gamble Investor Day since 2018

© Reuters.

By Sam Boughedda 

Procter & Gamble (NYSE:PG) held its first Investor Day since 2018 at its Cincinnati headquarters, with analysts at BofA, Wells Fargo, and Deutsche Bank releasing positive notes following the event.

BofA analysts, who have a Buy rating and $170 price target on the stock, said the key theme they identified at the event "is that the organization and strategy changes are working, as evidenced by 6% organic sales growth CAGR and broad improvements across their 10 category segments."

"Big picture: there is no change to FY23 guidance or long-term algorithm (organic sales exceeding category growth, mid-single to high-single-digit EPS growth, with expanding market share and after-tax margin growing
+30-70bps p.a.). Clearly, the near-term bottom-line delivery is impacted by the reiterated $3.9Bn of combined FX, freight, and commodity headwinds, however, over time it's clear that P&G expects to average out over its algorithm," added the analysts.

Wells Fargo analysts said the analyst day "offered few surprises," but they "certainly walked away with plenty to chew on."

"As for the stock? We like it—in our view one of the few names in the Staples sector to offer upside to numbers, and potential to shift narrative," declared the analysts, who maintained an Overweight rating and $155 price target on the stock.

Finally, Deutsche Bank analysts said no news is good news, while the company provided a "strong and clear statement of confidence."

"PG's first Investor Day since 2018 reaffirmed the company's strategic choices over the past several years, and underscored management's commitment to strengthening the execution of these choices to deliver "balanced growth" and value creation in the years ahead," said the analysts. "PG remains on track to deliver at least $5.81 in FY23 EPS despite (i) challenges from commodities, FX, and freight that amount to a $3.9 billion after tax headwind, or roughly $1.57 per share, (ii) likely increasing pressure from retailers further tightening inventory levels to preserve their own cash, and (iii) continued COVID-related lockdowns in China (and their impact on overall market growth)."

The Deutsche Bank analysts maintained a Buy rating and $156 price target on Procter & Gamble.