Raymond James raises price target on shares of Procter & Gamble, maintains Outperform rating By Investing.com
Raymond James maintained an Outperform rating on Procter & Gamble (NYSE: PG ) and raised the price target to $190 from $187.
The correction follows Procter & Gamble’s announcement of organic sales growth for the first quarter, which was in line with the previous quarter and exceeded cautious market expectations.
Procter & Gamble reported a minor earnings per share (EPS) beat, with the figure coming in at $1.93 compared to the $1.91 that was expected and the $1.90 consensus. This result was helped by below-the-line performance. Additionally, the company reiterated its full-year sales and EPS outlook.
An analyst from Raymond James noted that Procter & Gamble’s performance hasn’t changed much since the fourth quarter. The company experienced growth in the US and Western Europe, which helped offset increased softness in China and the Middle East. Organic sales grew 4% in North America and 3% in Western Europe year over year, while China fell 15%.
Raymond James’ assessment suggests that Procter & Gamble is in a stronger position than ever to handle a potential recession. Results from this quarter reflect this strength, with realistic expectations from Wall Street and sufficient flexibility in the company’s business model to meet full-year targets.
In other recent news, Procter & Gamble (P&G) reported a steady start to fiscal year 2025 with organic sales up 2%, while North America showed a 4% increase driven by volume growth. Core earnings per share (EPS) rose 5% to $1.93, and the company plans to return $16 billion to shareholders through dividends and stock repurchases.
Despite a 15% drop in sales in China and ongoing pressures in the childcare sector, the company remains confident in its innovation pipeline and its ability to weather macroeconomic challenges. IP&G maintains its 2025 financial guidance with organic sales growth expected to be 3%-5% and core EPS forecast between $6.91 and $7.05.
The company is targeting annual cost savings of $1.5 billion, and expects to mitigate the effects of inflation over the next six to nine months.
InvestingPro Insights
Procter & Gamble’s strength, as highlighted in Raymond James’ analysis, is further supported by data from InvestingPro. The company’s market capitalization stands at $403.37 billion, underscoring its position as a dominant player in the Home Products industry. This is in line with one of InvestingPro Tips, which notes the existence of a significant PG industry.
The company’s financial health is reflected in its ability to maintain dividend payments, with InvestingPro data showing a current dividend yield of 2.35%. Even more impressively, InvestingPro Tip points out that PG has grown its dividend for 41 consecutive years, demonstrating a strong commitment to shareholder returns even in challenging economic conditions.
Despite the softening in China mentioned in the article, PG’s overall financial performance remains strong. The company’s revenue for the last twelve months from Q1 2023 was $83.91 billion, with a gross margin of 51.76%. This strong profit is consistent with InvestingPro’s tip indicating that PG has been profitable over the past twelve months.
For investors seeking a deeper understanding of PG’s financial condition and future prospects, InvestingPro offers 11 additional tips not covered here. This information can provide valuable context for evaluating the company’s performance against Raymond James’s optimistic outlook and price target increase.
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