Procter & Gamble In Talks To Spinoff Beauty Line, But Will There Be Any Takers?

Bank of America issued a company update on

after news was released saying the company may sell or offer an IPO for some of its beauty brands such as Hugo Boss, Gucci and Covergirl. Bank of America rates Procter & Gamble as a Buy with a $95 price target. Analyst Olivia Tong wrote, "P&G is the industry bellwether and one of the higher-quality companies in the consumer industry, owing to an extremely well-diversified product portfolio, leading share positions, and solid developing markets presence...management noted plans to move to 10 categories and 65 brands, or exiting 14 percent of sales/6 percent of profit, with all exits announced by June ‘15 and completed by June ‘16." Procter & Gamble's commitment to cost-cutting should provide it with the funding to execute on brand investment while posting competitive profit growth. The company's core business model is not in the prestige channel, thus making these offerings a logical decision. Procter & Gamble is believed to want to focus on its personal care portfolio which includes brands such as Pantene and Head & Shoulders. Shares of Procter & Gamble recently traded at $82.18, down 0.82 percent.