Procter & Gamble shares jumped more than 4% on Tuesday following better-than-expected quarterly earnings that were released before the opening bell. While sales missed the mark, profitability was solid, excluding charges related to writing down the value of Gillette and non-core restructuring measures. P & G raised the low end of their full-year EPS guide. Sales in the three months ended Dec. 31 increased 3% year over year to $21.44 billion, short versus the $21.48 billion expected by analysts, according to data provider LSEG. Adjusted earnings per share rose nearly 16% to $1.84, topping analyst forecasts of $1.70. PG 1Y mountain Procter & Gamble 1 year Given the consumer products giant’s strong profitability and cash flow, we’re reiterating our $168-per-share price target. However, we’re downgrading shares from our buy-equivalent 1 rating to a 2 rating , which means we would wait for a pullback before considering buying more. The downgrade also reflects Tuesday’s sharp increase in a muted overall market, which is uncharacteristic of this particular stock and therefore should not be chased. Bottom line Procter & Gamble delivered a solid quarter as a 4% increase in the prices it charges for its products proved to have minimal impact on the volumes – unchanged on a reported basis and down only 1% organically. Volume levels are a key watch item that we called out in Saturday’s preview commentary . The organic volume decline came as weakness in Greater China, Eastern Europe, the Middle East, and Africa offset strength in North America and Europe’s main markets. P & G’s brands include household names from Crest toothpaste to Pampers diapers to Tide laundry detergent to Gillette to Vicks cold and flu products. Organic sales grew 4% in the quarter. That screens as a slight miss. However, a note from Citi said that buy-side expectations were tracking more in the 3% to 4% range. So, technically a miss – but in reality, likely in line to better than expectations as…
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