On Friday, Stifel analysts adjusted their outlook for Procter & Gamble (NYSE:PG) shares, reducing the price target from $167.00 to $161.00 while maintaining a Hold rating. The revision reflects expectations for Procter & Gamble’s organic sales growth, which is now projected to be around 3.5% from the second to the fourth quarter of fiscal year 2025, culminating in full-year organic growth at the lower end of the 3%-5% range previously anticipated.
The forecast for fiscal year 2025 earnings per share (EPS) is set at $6.94, aligning with consensus estimates but positioned at the low end of the company’s 5%-7% guidance. The new price target is based on 16 times Procter & Gamble’s expected fiscal year 2026 EBITDA, suggesting that the company’s shares are currently trading near fair value.
Analysts anticipate that the second quarter of fiscal year 2025 will continue the trend observed in the first quarter, with growth in the United States balancing ongoing challenges in China. In the first quarter of fiscal year 2025, Procter & Gamble achieved organic sales growth of 4% in the United States, which was consistent with the growth in the fourth quarter of fiscal year 2024. However, the company faced a decline of 15% in Greater China, a significant drop from the 8% decline seen in the previous quarter.
Procter & Gamble has demonstrated resilience in its market share performance, maintaining or growing its position in 28 out of the top 50 category/country combinations during the first quarter of fiscal year 2025, an improvement from the 25 combinations reported in the fourth quarter of fiscal year 2024. This performance indicates the company’s ability to hold its ground in a competitive global market.
In other recent news, Procter & Gamble (P&G) has been the focus of several key developments. The company announced a quarterly dividend of $1.0065 per share, marking the 134th consecutive year of dividend payments and the 68th year of dividend increases. In analyst activity, Deutsche Bank (ETR:DBKGn) lowered its stock price target for P&G to $188, citing pressures on the company’s fundamentals and a ransomware attack on its main transportation management service provider.
DA Davidson upgraded P&G stock from Neutral to Buy, increasing the price target to $209 based on the company’s performance and growth expectations. Jefferies maintained a Hold rating and a steady price target of $174, reflecting a cautious outlook due to supply chain disruptions and increased foreign exchange pressure. Raymond (NS:RYMD) James also maintained an Outperform rating on P&G with a $190 price target.
In other developments, P&G committed to greater transparency regarding its wood-pulp supplier audits, aiming for more sustainable sourcing practices. The company reported a 2% increase in organic sales for the first quarter, primarily driven by volume growth and pricing strategies. P&G also plans to return $16-17 billion to shareholders through dividends and share repurchases.
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