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Procter & Gamble posted a stable earnings report Tuesday, however the inventory edged decrease on Wednesday.
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Procter & Gamble’s
solid financial results apparently is probably not sufficient to maintain some buyers and analysts bullish on its shares.
Citigroup downgraded the inventory on Wednesday, the day after the patron merchandise maker reported better-than-expected fiscal third-quarter earnings. Procter & Gamble inventory was a contact decrease in current buying and selling, down 0.7% to $136.77 in current buying and selling. The shares have fallen 1% yr to this point and have risen 15.4% previously 12 months.
Analyst Wendy Nicholson reduce her ranking on Procter & Gamble (ticker: PG) to Neutral from Buy, and lowered her worth goal to $150 from $165. She famous that outcomes have been above expectations. But the corporate’s deliberate worth will increase and different responses to greater enter prices left her feeling that “the next several couple quarters will likely see incremental pressure and that results could be bumpy,” she wrote.
P&G’s worth will increase on a few of its portfolio gained’t take impact till September, so commodity inflation will stress the corporate over the subsequent few months. The firm is also dealing with much less favorable international alternate charges and tough comparisons to 2020, when the pandemic boosted gross sales. Nicholson additionally warns that some rising markets the place P&G operates “look to be getting worse before they get better,” with out a lot visibility into a timeline for restoration.
These elements might restrict the corporate’s steering and weigh on its fiscal 2022 outlook, Nicholson warns.
Moreover, whereas the shares look comparatively low-cost—buying and selling at a 6% premium to the
S&P 500,
in contrast with 25% traditionally—near-term headwinds will probably maintain that valuation from increasing.
That stated, Nicholson nonetheless believes the corporate is a good long-term core holding, including that it seems to be well-positioned in some key markets and classes. She highlights its sturdy dividend progress and money move, in addition to its “terrific track record of innovation and marketing.” But for now, she says it’s safer to attend it out on the sidelines.
Write to Teresa Rivas at teresa.rivas@barrons.com
