Bank Of America Changes Price Targets On Sally Beauty, Procter & Gamble And Avon Products

Bank of America made changes to price targets on several consumer staples stocks Friday. Below are some of the changes along with current ratings and comments from lead analyst Bryan Spillane.

Sally Beauty Holdings, Inc. SBH - Buy, price target raised from $33 to $34.

The price target was “based upon a P/E of 17x our CY16 estimate one year out. Our target suggests a discount to the combined Household/Personal Care comp group. SBH exhibits defensive growth characteristics and strong relative growth prospects, and while more recently, results had been tempered by sluggish same-store sales comps, we expect fundamentals to start recovering.

“Risks to our price objective are an inability to improve same-store sales comps, slowing benefits from the CRM program and mix shift, and a downturn in the US consumer environment.”

Procter & Gamble Co PG - Buy, price target raised from $93 to $95

The target was “based on a P/E of 19x our CY16 EPS estimate one year from today, slightly below our target P/E for the large-cap HPC group. PG has shown progress toward its savings commitment, and while top-line growth has slowed, an improved portfolio and overhead streamlining opportunity should ultimately drive a higher valuation.

“Risks to our price objective are a continued sluggish global consumer, lower-than-expected returns on heavy reinvestment, and a greater-than-anticipated need to roll back pricing.”

Avon Products, Inc. AVP - Neutral, price target lowered from $12 to $11.

The price target cut was “driven by a P/E of 11x our ex-charges 2016 EPS estimate, which would put AVP at roughly a 40 percent discount to our target P/E for the large-cap HPC peer group, in-line with where shares currently trade. If management can get execution back on track, this may prove conservative given the company's growth-advantaged market exposure.

“Risks to our price objective are an inability to reaccelerate growth in key markets, greater than anticipated reinvestment behind structural change, a stronger US$, and further currency devaluation in Venezuela and Argentina.”

Sally Beauty recently traded at $31.15, up 0.10 percent.

Procter & Gamble recently traded at $90.29, down 0.13 percent.

Avon Products recently traded at $9.68, down -3.01 percent.