Credit Suisse Raises Price Target On Procter & Gamble

Credit Suisse raised its price target on Procter & Gamble Co PG Friday from $85 to $90 and maintained a Neutral rating.

Analysts led by Michael Steib commented that “PG presented a coherent overview of its key strategic priorities at its investor seminar. We left the event with the impression that a lot of the initiatives PG has been working on are finally starting to come together and that the company would be able to deliver financial results comfortably within or above its longer term targets if it were not for external headwinds such as FX.

“We had been concerned that the company was attempting to implement too much change too quickly but we increasingly view the risk of disruption as manageable. While Duracell was probably the last of the bigger disposals, we think the deal structure was very elegant as it minimizes dilution and tax consequences.”

Steib concluded that “Other than FX, we see very limited downside risk to the FY15 guidance at this stage. PG's outlook appears to factor in a lot of the downside risk factors (FX headwinds as much as visibility permits, slowing EMs, still subdued US consumer demand, commodities pressure) yet none of the potential upside should one or several of these external headwinds ease or even turn into a tailwind.”

Procter & Gamble traded at $88.42 in the premarket, down 0.20 percent.