Societe Generale downgrades Procter & Gamble after signs that business operations are struggling

On Wednesday Societe Generale issued a report on Procter & Gamble Co.

after the company reported Q3 2015 earnings that were in line with consensus estimates but included a disappointing sales growth of 1 percent. Societe Gamble downgraded Procter & Gamble from Buy to Hold and reduced their target price from $96 to $86. Chas Manso and Iain Simpson, analysts at Societe Generale, wrote, "At the Q2 results stage, P&G management had suggested OSG would modestly accelerate from that quarter's 2 percent...P&G suffered heavy promotional pressure...while shipments were impacted by faster than anticipated inventory draw-downs…" "P&G anticipates that this quarter will represent the low point for its organic sales growth. The company is optimistic about how its new portfolio will perform once the disposal process is over." Procter & Gamble reported EPS of $0.92, down 8 percent from last year while currency headwinds stemming from the strong dollar had an impact on revenues which were reported at $18.1 billion. After a review, analysts at Societe Generale determined that all three major divisions of P&G, Fabric and Home, Baby and Family, and Beauty decelerated this past quarter. This suggests that the company is lacking a growth strategy to accelerate earnings. The analysts believe that if P&G doesn't adjust their business operations the company will lose market share to competitors that are being more aggressive in the marketplace. Currently Procter & Gamble is trading at $80.05, down 0.46 percent.