Joe Raedle
Goldman Sachs downgraded Procter & Gamble (NYSE:PG) to a Neutral rating from Buy as part of a cautious view on consumer staples in general.
“Relative valuation levels for Staples are daunting; now even richer than the onset of the last recession,” he said. “The group mostly seems less defensive to us today given the less support to our multiples especially if the group’s P/E recouples with rates,” noted analyst Jason English.
A favorable pricing environment in the U.S. is expected to benefit household product stocks like P&G, but currency exposure and a harsher environment in Europe is expected to offset.
English and team do not think Procter & Gamble (PG) can grow market share as it did during the height of the pandemic when ownership of its supply chain made it able to move inventory when competitors could not. The firm forecasts P&G’s 2023 sales about 70 basis points below consensus marks after accounting for headwinds like foreign exchange and Europe.
Goldman Sachs lowered its price target on P&G to $143. Shares of P&G slipped 1.25% to $122.72 in premarket action on Monday.
See all the valuation metrics on Procter & Gamble.
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