Procter & Gamble Co (PG US): Downgrade to Hold: Reinvestment yet to pay off

研报英文原文证据摘录

Procter & Gamble Co (PG US): Downgrade to Hold: Reinvestment yet to pay off

.00

we expected.

155.00

On profitability, adj. gross margin was flat despite c160bp of productivity savings, and

adj. operating margin contracted 131bp as SG&A reinvestment (primarily marketing) 07/25 01/26 07/26130.00

more than offset c300bp of productivity. P&G is spending heavily to reignite growth, Target price: 149.00

High: 167.20 Low: 138.04 Current: 146.15

but for now reinvestment is absorbing the benefits of the productivity program rather Source: LSEG IBES, HSBC estimates

than compounding into margin expansion—and a volume payoff is not yet evident.

Against this backdrop, FY27 guidance (organic sales +1% to +3%, core EPS +0% to Diego Serrano* Analyst, Consumer Staples

+3%), which embeds headwinds from higher costs, looks realistic rather than HSBC Mexico, S.A., Institucion de Banca Multiple, Grupo

Financiero HSBC

ambitious—more consistent with a business in transition than one at an inflection diego.serrano@hsbc.com.mx

point. With shares trading broadly in line with historical average multiples, we think +52 55 8551 3361

the risk/reward no longer supports a Buy. Jeremy Fialko*, CFA

Senior Global Consumer Staples Analyst

Downgrade to Hold; target price revised to USD149 (from USD182): Our target price HSBC Bank Middle East Limited, DIFC

jeremy.fialko@hsbc.com

of USD149 implies limited upside from current levels. We update our estimates to reflect +971 4 509 3366

4Q results and FY27 guidance, lowering our FY27 adjusted EPS growth assumptions by

c1.4-3.2%. We continue to view P&G as one of the highest-quality franchises in * Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is

not registered/ qualified pursuant to FINRA regulations