Morgan Stanley Expects Weaker Organic Sales Growth For Procter & Gamble

In a report published Monday, Morgan Stanley analyst Dara Mohsenian reiterated an Equal-Weight rating and $96.00 price target on

. In the report, Morgan Stanley noted, "Recent press reports indicate that PG is considering divesting parts or all of its beauty business as part of its recently announced divestiture process. We expect PG will keep its core beauty brands (Pantene, Olay, and Head & Shoulders), which area better fit with PG's innovation and mass channel driven focus than the rest of the beauty portfolio. "Net, we continue to view PG's divestiture process favorably long-term, as the divestiture of lower margin and lower growth brands should leave behind a more attractive and narrowly focused portfolio,and a high multiple CPG environment should allow PG to realize solid value for divestitures,albeit with potential tax complications. "Still, near-term, stranded overhead and EPS dilution with divestitures will pressure PG fundamentals at a time when we believe PG trends are already under pressure. We also point out that upside from the potential to realize value through divestitures is limited in our minds given our sum-of-parts indicates little potential upside to the stock." Procter & Gamble closed on Friday at $84.74.