Goldman Sachs Downgrades Procter & Gamble (PG) to Sell
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Goldman Sachs downgraded Procter & Gamble (NYSE: PG) from Neutral to Sell with a price target of $77.00 (from $86.00).
Analyst Jason English comments "While prospective tax policy changes remain uncertain, our previously published scenario analysis (Corporate tax policy implications for Consumer Staples, on December 19) suggest PG may prove a relative laggard given its already low tax rate and relatively small international cash balance. And given PG’s size, we view needle-moving M&A as unlikely."
Eglish calls PG valuation "rich" saying: "In a still relatively rich sector, PG stands out with its absolute P/E still near a decade high of 21.6x, its P/E relative to HPC peers at a 6-yr peak at roughly a 10% premium, and the richest EV/EBITDA multiple in the group at 15.4x (vs. the 13.3x peer average)."
Shares of Procter & Gamble closed at $85.03 Friday.
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