What Is The Tariff Risk For Procter & Gamble? Analyst Calculates, Trims Outlook

B of A Securities analyst Bryan D. Spillane on Friday, reiterated a Buy rating on Procter & Gamble CO PG stock, and lowered the price forecast from $190.00 to $180.00.

PG's strong third-quarter performance was overshadowed by concerns over potential U.S. tariffs, which could cost the company $1 billion to $1.5 billion annually.

The analyst states that despite a 3.7% stock drop, PG believes it can offset the impact through favorable foreign exchange, lower input costs, and strategic pricing.

Also Read: PepsiCo CEO Warns Of Tariffs Led ‘Increase In Supply Chain Costs,' Cuts Annual Profit Outlook

While category growth has softened slightly, core consumer demand remains stable. PG also reports positive momentum in China and Latin America.

Procter & Gamble's reduced FY25 outlook reflects early tariff impacts and slower growth, but FY26 could see more upside if tariffs are eased and global consumer trends improve amid economic uncertainty.

The analyst has reduced the EPS projections for FY25 and FY26 due to expected margin compression. Fourth-quarter organic sales estimate has been slightly adjusted to a 1.9% increase based on flat volumes and 2% pricing growth.

The analyst has trimmed the fourth-quarter gross margin forecast by 30 basis points to 51.1%, down 10 basis points year-over-year, and cut EPS estimate by 9 cents to $1.44.

For FY25, the analyst has lowered gross margin expectations by 30 basis points to 51.6%, reflecting potential one-month tariff costs between $100 million and $160 million. The analyst has also reduced the sales and margin outlooks for FY26 and FY27 due to ongoing tariff pressures and slower category growth.

Price Action: PG shares traded higher by 1.04% at $161.16 at last check Friday.

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