Citi maintains Buy on Procter & Gamble, reiterates $200 target

Published 22/01/2025, 15:12
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Wednesday saw Citi analysts maintain their Buy rating on Procter & Gamble (NSE:PROC) stock, with a steady price target of $200.00. The affirmation came after the company reported its second fiscal quarter earnings for 2025, surpassing expectations with organic sales growth (OSG) and earnings per share (EPS).

Procter & Gamble (NYSE:PG) reported an OSG of approximately 3%, which was higher than the buy-side expectations of around 2% prior to the earnings release. The unrounded OSG figure stood at 3.0%, exceeding both Citi's estimate of 2.3% and the consensus of 2.5%. The core EPS for the quarter reached $1.88, surpassing Citi's estimate of $1.84 and the consensus estimate of $1.86. The stronger than anticipated top-line performance and favorable non-operating items were key contributors to the earnings beat.

Despite an additional $300 million after-tax foreign exchange headwind impacting the bottom line, Procter & Gamble reiterated its full-year 2025 guidance for both the top-line and EPS. This reiteration underscores the company's confidence in its guidance and suggests robust productivity measures that may offset the foreign exchange pressures.

The conference call to discuss the quarterly results was scheduled for today at 8:30 am ET. Citi analysts expect a positive reaction from the stock market to Procter & Gamble's second-quarter performance. They believe the earnings beat will provide investors with greater assurance regarding the company's guidance for the second half of fiscal year 2025.

In other recent news, Procter & Gamble has reported second-quarter fiscal year 2025 results, revealing sales that surpassed expectations and earnings before interest and taxes (EBIT) that met consensus estimates. The company achieved a 3% organic sales growth, slightly above the market consensus of approximately 2%, and an EBIT of $5.7 billion. Procter & Gamble has maintained its full-year 2025 guidance, projecting organic sales growth between 3% and 5% and earnings per share (EPS) growth of 5% to 7%.

Stifel analysts have maintained a Hold rating on Procter & Gamble stock with a price target of $161.00, while RBC Capital Markets maintained their Sector Perform rating with a consistent price target of $164.00. DA Davidson upgraded Procter & Gamble stock from Neutral to Buy, raising the price target to $209.

The company announced a quarterly dividend of $1.0065 per share, marking the 134th consecutive year of dividend payments. Procter & Gamble also plans to return $16-17 billion to shareholders through dividends and share repurchases. Finally, Procter & Gamble has committed to greater transparency regarding its wood-pulp supplier audits, aiming for more sustainable sourcing practices. These are recent developments that reflect an evolving landscape for Procter & Gamble.

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