Procter & Gamble Visibility Will Improve, Credit Suisse Predicts

In a report published Friday, Credit Suisse analysts maintained an Outperform rating on Procter & Gamble Co (NYSE: PG), with a target price of $105.The company reported its quarterly results with an in-line EPS but lower-than-expected organic growth. The decline in the company's beauty business, lower growth in prestige fragrances and skincare brands and increased promotional activity were responsible for the lag in the organic growth."Trade inventory issues impacted emerging market growth: Developing market volume was down low single digits following significant price increases taken to offset FX and adjustments made to correct trade inventories in Mexico and China," the analysts said. "These adjustments had about a 1% impact on the company's top line and are expected to still affect one or two more quarters," the analysts added.Procter & Gamble reduced its FY15 organic revenue guidance to "low single digits" from "low to mid-single digits." The EPS estimates for FY15 and FY16 have been reduced from $4.05 to $3.07 and from $4.38 to $4.33, respectively.A full visibility into the company's final portfolio is expected by the end of the summer when the company announces its disposal program. "The expected positive impact to organic growth should become more visible as business units and brands are moved to discontinued operations and then sold," the report mentioned.