CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
We lift our 12-month target price by $6 to $175, 26.3x our next-12-month EPS of $6.67 vs. consensus’ $6.72. Our FY 2024 and FY 2025 EPS estimates are unchanged. The multiple is a premium to the five-year forward P/E average of 24x, which we think is warranted by wage trends running above inflation rates. We anticipate this dynamic to impede meaningful demand destruction as we see relatively safe staple demand compared to more discretionary items. We think PG’s margin performance, notably above its pre-pandemic levels, should provide levers to offset any turbulence if it develops. Our view reflects better volume performance in the coming two quarters, relative to the next two, and we see top-line performance surprising to the upside, which we think will lift margin performance. PG currently houses a strong cash position, a share repurchase program, and a healthy delta between its free cash flow and its allocation strategies, which should prove attractive should our top-line thesis fail to materialize.