Five analysts have downgraded Procter & Gamble (PG) in the past three months. In April, ten analysts maintained a “buy” rating on Procter & Gamble stock. Now, only five analysts have a “buy” rating on Procter & Gamble. Underperformance on the sales and margins front irked analysts. The challenges aren’t expected to subside soon, which will likely keep analysts on the sidelines.
Several analysts have also lowered their target price on Procter & Gamble stock in recent months, as you can see in the following chart.
Procter & Gamble is losing market share to local and private-label players. The company’s decision to invest in price to support volumes punctured its margins. The company’s lower net price realization and higher input costs are expected to continue to hurt its organic sales growth rate and profit margins in the near term.
Ratings and target price
Of the 23 analysts covering Procter & Gamble stock, 74.0% recommend a “hold,” 22.0% recommend a “buy,” and 4.0% recommend a “sell.” Analysts have a consensus target price of $81.17 per share on Procter & Gamble stock, which implies an upside of 4.3% to its closing price of $77.86 on July 9.
Given the sales and margin headwinds in the near term, analysts also maintain a “hold” recommendation on other major consumer packaged goods stocks like Colgate-Palmolive (CL), Clorox (CLX), and Kimberly-Clark (KMB).