Courtesy of Benzinga.
Procter & Gamble Co (NYSE: PG) shares suffered a steep stumble through the first four months of the year, but the second quarter saw some long-awaited relief.
Unfortunately, the recovery isn’t expected to last much longer.
The Rating
Jefferies analyst Kevin Grundy downgraded Procter and Gamble to Hold and cut his price target from $83 to $79.
The Thesis
Grundy anticipates challenges to P&G’s market share and top line in 2019. As such, he cut his bottom-line estimate 6.5 percent.
“Our prior constructive thesis had been predicated on an inflection in organic sales,” the analyst wrote in a Monday note. “However, slowing market growth, EM [emerging market] volatility, US retail difficulties, the stronger USD, and pricing challenges should drive estimates lower again at P&G.”
He deemed the stock’s current price “reasonable” and even noted potential for the 18 times price-to-earnings ratio to drop to 17.5 times.
Nonetheless, Jefferies recognizes the distant possibility of improvement. Efforts by activist investor Nelson Peltz, whose Trian holds a seat on the board, could drive strategic changes in the form of a segment sale, restructuring or major merger.
Price Action
Shares closed Monday down 1.8 percent at $77.86.
Related Links:
Argus Cites Disappointing Organic Growth In Procter & Gamble Downgrade
What Is A ‘Snake Pit’ And Why Should Procter & Gamble Shareholders Care?
Photo courtesy of Procter & Gamble.
Latest Ratings for PG
Date | Firm | Action | From | To |
---|---|---|---|---|
Jul 2018 | Jefferies | Downgrades | Buy | Hold |
Apr 2018 | Bank of America | Downgrades | Buy | Neutral |
Apr 2018 | Morgan Stanley | Maintains | Equal-Weight | Equal-Weight |
View More Analyst Ratings for PG
View the Latest Analyst Ratings
Posted-In: Jefferies Kevin GrundyAnalyst Color Downgrades Price Target Analyst Ratings Best of Benzinga