Procter & Gamble Co (NYSE:PG, ETR:PRG)’s long-term growth trajectory is intact despite short term market challenges, analysts at Goldman Sachs believe.
Analysts wrote that they left recent meetings with P&G’s management team “broadly encouraged” by its growth trajectory.
“Management struck a confident tone as it remains laser focused in its pursuit towards irresistible superiority and driving category growth/share while maneuvering through volatile market headwinds,” they wrote.
“Management believes the US is still the market with the most growth potential. Management sees opportunities to improve and delight across all categories and expects to grow in every category (and profitably).”
The analysts wrote that they got the sense that pressures have increased this calendar year given end market demand slowing, volatility increasing, pricing becoming more challenging and potential retailer destocking.
“However, despite some short-term volatility, which will likely impact P&G, management believes it can respond and navigate much quicker than its peers,” they wrote.
P&G remains one of the most resilient staples companies, analysts wrote.
They see positive mid-single digit earnings per share growth over the long term as the company's strong top line is coupled with productivity savings and operating leverage.
“That said, we remain on the sidelines owing to the still-volatile macro environment including FX, geopolitical tensions, potential policy changes, and China’s recovery still in nascent stages,” analysts wrote.
Analysts awarded P&G a ‘Neutral’ rating and $165 price target, implying downside of 3.5% from its share price at the time of writing.