UBS Upgrades Procter & Gamble (PG) to Buy; 'Recent Underperformance Unwarranted'

UBS analyst Peter Grom upgraded Procter & Gamble (NYSE: PG) from Neutral to Buy with a price target of $163.00 (from $157.00).

The analyst commented, "We are upgrading Procter & Gamble to Buy (from Neutral) and raising our NTM price target to $163 (from $157), +18% upside from yesterday's close. P&G has been the worst performing stock across our HPC coverage universe YTD, which is partially due to the unwind in the group but also concerns around the ability for P&G to deliver outsized EPS growth/positive revisions looking ahead. We view concerns on the latter as misplaced and believe an earnings inflection is on the horizon looking out to FY24. Our detailed bottom-up analysis points to nearly +5% organic revenue in FY24 predicated on LSD consumption, a return to share gains, premiumization, and a benefit from China reopening. With strong top-line growth and a balanced approach towards reinvestment/flow-through, we see upside to Street estimates looking out to next year, and see a path sustained HSD EPS growth on a multi-year basis. With shares now trading at 22x our revised FY24 forecast (vs. 5-yr historical avg. of 23x), we think the risk/reward at current levels is attractive."

For an analyst ratings summary and ratings history on Procter & Gamble click here. For more ratings news on Procter & Gamble click here.

Shares of Procter & Gamble closed at $137.56 yesterday.

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