JPMorgan believes that improved sales growth and wider profit margins could boost shares of Procter & Gamble after its underperformance over the past 12 months. The investment bank upgraded the Gillette razor and Tide detergent maker to an overweight rating from neutral, with analyst Andrea Teixeira raising her 12-month price target to $165 from $157. Shares of Procter & Gamble are down more than 10% over the past 12 months. Teixeira’s revised price forecast implies upside of 11% from P & G’s Thursday close. PG 1Y mountain P & G shares over the past year The analyst’s upgrade comes after Procter & Gamble posted fiscal second-quarter adjusted earnings of $1.88 per share, topping the $1.86 analysts polled by LSEG had expected, even as $22.21 billion in revenue trailed the $22.28 billion consensus. “We believe the company is poised to accelerate organic sales growth (OSG), improve margins in the medium term, and hence will likely re-rate back to historical valuation multiples,” the analyst wrote. Teixeira pointed to P & G management’s positive tone on its Thursday earnings call as providing “much needed and hoped for reassurance” that the company is set to improve organic sales growth to between 2% to 3% in the second half of the year from zero in the fiscal second quarter. “[Organic sales growth] was up +3% in markets outside the U.S., in-line with underlying growth, but declined -2% in the U.S., below the market, due to shipment dynamics in the base period. Looking ahead, management is confident that F2Q marks their lowest quarter this fiscal year, with acceleration in F2H due to: 1. lapped base period tough comps; and 2. the company’s potential share recovery,” she wrote. While Teixeira maintained her earnings estimates for fiscal 2026, she raised her expectations for both fiscal 2027 and 2028. As a catalyst, the analyst pointed to a corporate restructuring, which should provide upside to current margins and reignite growth across the business. “While we acknowledge that there are execution risks to recovering share, we give PG the benefit of the doubt in light of its substantial marketing budget and consistent AI investment that will likely improve [returns on investment] going forward,” she added.
