Procter & Gamble's (PG) topline fundamentals are encouraging and market share recovery continues to build, with the company holding levers to manage through the elevated cost environment, RBC Capital Markets said in a note Thursday.
The company's fiscal Q1 organic sales growth of 4% was strong, driven by two one-time tailwinds, including European volume that was pulled forward from Q2 and China Baby Care benefit due to near-term supply disruption at key competitor, according to the note.
Management reiterated its fiscal 2027 guidance, which RBC said is the "right posture" amid a volatile macro environment. The company continues to guide for fiscal 2027 organic sales growth in the range of 1% to 3% and core earnings per share between $6.89 and $7.11.
The investment firm raised its fiscal 2027 organic sales growth estimate to about 3% from 2.2% previously, while full-year EPS is now estimated at $6.92, compared with $6.93 prior, on account of higher cost structure going forward.
RBC Capital Markets maintained its outperform rating on the stock and raised the price target to $169 from $166.
Procter & Gamble shares were down about 2% in Friday trading.
Price: 161.25, Change: -3.26, Percent Change: -1.98
