Citi places Procter & Gamble on positive catalyst watch ahead of FQ1 gains

Citi Research placed Procter & Gamble (PG) on a positive 90-day catalyst watch into the company’s fiscal first quarter results anticipating stronger organic sales in the U.S. and greater demand for diapers in China due to safety concerns surrounding a competitor.

The upside should remain intact and gain momentum as the company’s Investor Day on November 19 will provide a platform to highlight early success from P&G’s strategic changes implemented over the past few years.

The consumer products conglomerate reports fiscal first-quarter results before the market opens on October 22. Citi Research analyst Filippo Falorni sees organic sales growth accelerating to ~3% with the company’s shipment-consumption gap narrowing further by “healthy” consumption trends, along with stronger demand in China for P&G diapers.

“While the company is facing stronger cost headwinds from oil & freight, we believe there is sufficient flexibility in PG’s guidance, and the company can lean into productivity savings to help offset these pressures,” Falorni writes in a note to clients.

Falorni maintains his Buy rating on Procter & Gamble (PG) and a $180 price target, which assumes an additional 18% upside to Tuesday’s close.

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