Jefferies Lowers Price Target for Procter & Gamble Amid Cautious Outlook
Jefferies has revised its price target for Procter & Gamble (P&G), trimming it from $172 to $167 while maintaining a ‘Hold’ rating on the stock. The adjustment reflects tempered expectations for organic growth and gross margin performance in the near term, despite an overall positive long-term outlook.
According to the brokerage, P&G’s organic growth is expected to decelerate in the latter half of fiscal year 2024. This moderation is attributed to a combination of cyclical pressures and strong year-over-year comparisons, particularly following robust post-COVID expansion and previous pricing actions.
Jefferies analysts also pointed to upcoming headwinds in gross margin that could weigh on profitability. These include rising costs in raw materials and a competitive promotional environment, especially in developed markets. While P&G has benefited from cost savings and productivity programs, these factors may be partially offset by unfavorable input costs and currency movements.
Despite the near-term caution, Jefferies underscored P&G’s fundamentals as “solid,” citing the company’s strong brand equity, disciplined execution, and strategic focus on product innovation and premiumization. P&G’s portfolio—anchored by household staples across categories such as fabric care, grooming, and personal health—continues to command consumer loyalty and pricing power.
The revised $167 target price reflects roughly 23x Jefferies’ 2025 earnings per share estimate. This valuation suggests a balanced risk-reward profile relative to P&G’s historical trading multiples and sector peers in the consumer staples space.
For FMCG stakeholders, the update serves as a barometer of market sentiment toward large-cap CPG companies amid evolving macroeconomic dynamics. Slower volume growth, persistent inflation, and intensifying retail competition remain key themes that brand managers and analysts are closely monitoring in 2024.
Procter & Gamble shares have seen limited movement following the update, indicating investor alignment with the tempered but stable outlook. As global consumer behavior continues to normalize post-pandemic, the focus will remain on operational agility and margin management across the FMCG landscape.