Procter & Gamble's CAGNY Presentation Turns Macquarie Incrementally Bullish

Consumer products giant Procter & Gamble Co PG's presentation last week at the Consumer Analyst Group of New York conference prompted Macquarie Research to become incrementally bullish on the stock.

The Analyst

Analyst Caroline Levy maintained an Outperform rating on Procter & Gamble with a price target lifted from $100 to $110.

The Thesis

Procter & Gamble's CAGNY presentation was highlighted by three bullish takeaways, Levy said:

The company indicated that January and February trends remained strong, and the company benefited from a constructive pricing environment, Levy said. Encouragingly, this follows a corporate reorganization that's likely to have a longer-term positive impact, as "proof of concept can be seen" in the U.S. and China, with sales up 3 percent and 9 percent, respectively, she said. 

The company expects its new Gilette sensitive skin razor to regain lost market share from men who cited shaving pain as a deterrent, the analyst said. 

P&G's focus on technology to improve the consumer experience through P&G Ventures will transform the company into a faster and more consumer-focused one, Levy said. A partnership with M13 will help accelerate new and sustainable products that can be brought to scale, she said. 

Shares of Procter & Gamble are trading at 22 times Macquarie's 2019 estimated EPS, which implies a 35-percent premium to the S&P 500 versus a one-year average of 12 percent and five-year average of 17 percent.

"We like David Taylor's leadership and continue to believe that the business is on an upward trajectory," the analyst said. 

Price Action

Procter & Gamble shares were up 0.26 percent at $99.83 at the close Tuesday. 

Related Links:

Analysts Like Procter And Gamble Sales Numbers, Dislike Margins

4 Reasons Why Bank Of America Added Procter & Gamble To Its US1 Lists

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