Proctor & Gamble Shares Feel The Heat From Wells Fargo Downgrade

In a report published Friday, Wells Fargo analyst Chris Ferrara downgraded Proctor & Gamble PG from Outperform to Market Perform and lowered the valuation from $88.00-$90.00 to $85.00-$87.00. Ferrara noted Proctor & Gamble's slower progression due to competition, near-term obstacles and "vulnerable" launch activity. The analyst wrote, "Even as PG has ramped up innovation, US share trends have weakened in the face of competition, and PG's launch activity seems more vulnerable than ever to competitive promo as a defense against “innovation,” particularly in categories with higher avg selling prices (i.e. laundry). We think the structural changes, like the shift from Market Development Organizations (MDOs) to Selling and Market Operations (SMOs) and the redesign of the NA supply chain have potential." Wells Fargo added that weak fourth quarter sales and the possibility for the trend to continue for Full Year results, "makes share price outperformance less likely." Shares of Proctor & Gamble closed at $81.61 on Thursday. The stock dropped to $81.17 in Friday's pre-market.