Now is the time to buy Procter & Gamble , according to UBS, which says the company’s recent underperformance is “unwarranted.” Analyst Peter Grom upgraded the stock to buy from neutral and raised his price target for Procter shares to $163 from $157. The new forecast implies an 18% upside from Tuesday’s close price. “P & G has been the worst performing stock across our [home and personal care] coverage universe YTD, which is partially due to the unwind in the group but also concerns around the ability for P & G to deliver outsized EPS growth/positive revisions looking ahead,” Grom wrote in a Tuesday note. “We view concerns on the latter as misplaced and believe an earnings inflection is on the horizon looking out to FY24,” he said. The analyst also noted that Procter shares are trading slightly below their average five-year valuation, making “the risk/reward at current levels is attractive.” Grom added that a return to share gains, premiumization and a China reopening are leading to estimates of nearly 5% growth in organic revenue in 2024. “Positive estimate revisions have been a prerequisite for LC HPC stocks to work over the past year, and while we believe this has been a key reason P & G has lagged YTD, we see upside to consensus estimates looking out to FY24,” said Grom. P & G shares have fallen more than 9% in 2023, while the S & P 500 is up 3.4% in that time. The stock gained 1.4% in the premarket Wednesday. — CNBC’s Michael Bloom contributed to this report.
Read More: UBS upgrades Procter & Gamble, says household goods giant can rally nearly 20%
