- Raymond James analyst Olivia Tong reiterated an Outperform rating on the shares of Procter & Gamble Co (NYSE:PG) and lowered the price target to $155 from $175.
- The analyst also lowered her Q1, and FY23 EPS estimates to $1.54 and $5.75, respectively, as solid pricing and improved efficiencies are more than offset by a stronger U.S. dollar, cost pressures, and continued China lockdowns.
- Aside from still elevated commodity and transportation cost pressures, estimated at $2.4 billion after-tax for FY23, Q1 will include a few challenges for the company, including worsening FX, softening sell-in, supply chain constraints in some products and China lockdowns, weighing most heavily on Beauty, specifically the SK-II brand.
- But even with the challenges, Tong thinks Procter’s pricing power has held strong, supported by steady brand support and innovation and a price-laddered portfolio.
- The analyst added that optimizing product formulations and more tactical promotions are likely to help offset cost challenges and manage softening demand trends.
- The company is expected to report earnings on October 19.
- Also Read: Kraft Heinz Analyst Projects Gross Margin Inflection Ahead, Says Company Now Structurally Better Positioned
- Price Action: PG shares are trading higher by 0.23% at $124.51 on the last check Wednesday.
- Photo Via Company
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