CFO Meeting Reinforced Procter & Gamble's Status Of "Work-In-Progress"

CFO Jon Moeller held discussions focusing on the company's longer-term dynamics. In the short-term, however, the challenges remain considerable. UBS analysts maintained a Neutral rating and a price target of $90. The analysts commented, "Q3 will pose challenges (FX has not cooperated and pricing is only just now going into markets like Russia); however, Q4 should start to see commodity relief and easier comparisons (e.g., Beauty). Progress being made toward "simplicity" – now it's down to execution." "Overall, PG's core message seemed to be that recent productivity and portfolio rationalization efforts (all aimed at "simplification") were on track. PG is determined to streamline its processes and whittle down its portfolio to only those brands/SKUs that best leverage core competencies (i.e., science/engineering-based consumer value propositions)," UBS mentioned. "However, exactly when such pruning will help result in rejuvenated organic growth remains to be seen (especially as that pruning of SKUs itself, all else equal, could represent a further headwind to growth as it occurs). PG appeared optimistic that progress was being made, but was noncommittal on end-state timing," the analysts said. "With US business turning a long corner and cost and restructuring savings sizeable and sustainable, longer-term setup here remains compelling," wrote Deutsche Bank analysts in a report published on Thursday. "In the short-term, despite pricing to offset f/x headwinds, still below trend category growth in several markets, and likely dilution from divestitures creating clear overhang with ambitious implied June quarter guidance. Nonetheless, we are holding out for the latent virtuous cycle that has historically firmed in a US consumption-led recovery." Deutsche Bank maintained a Buy rating and a price target of $96.