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UBS analysts upgraded Procter & Gamble (NYSE:PG) stock to Buy from Neutral as they believe the recent stock underperformance is “unwarranted.”
The analysts also raised the price target to $163 per share from the prior $157 to reflect revised FY24 forecasts.
“P&G has been the worst performing stock across our HPC coverage universe YTD, which is partially due to the unwind in the group but also concerns around the ability for P&G to deliver outsized EPS growth/positive revisions looking ahead. We view concerns on the latter as misplaced and believe an earnings inflection is on the horizon looking out to FY24,” analysts said in a client note.
The new price target implies an upside potential of nearly 20% relative to yesterday’s closing price as analysts believe the risk/reward at current levels is “attractive.”
“Our detailed bottom-up analysis points to nearly +5% organic revenue in FY24 predicated on LSD consumption, a return to share gains, premiumization, and a benefit from China reopening,” the analysts added.
UBS believes PG can deliver sustained high-single-digits EPS growth on a multi-year basis, driven by “strong top-line growth and a balanced approach towards reinvestment/flow-through.”
Procter & Gamble stock trades about 1% higher in pre-market Wednesday.
