Barclays Sticks to Their Hold Rating for Procter & Gamble (PG)

Procter & Gamble (PG) reported fiscal 2026 organic sales growth of 1% and core EPS of $6.89. For fiscal 2027, PG guided organic sales growth of 1% to 3% and core EPS growth of 0% to 3%, citing a $1 billion cost headwind from higher raw materials, energy, and transportation costs. PG acquired Thorne, a premium supplements brand, to offset some pressure. Analysts estimate a target price of $180, implying 22.7% upside over 2.8 years. PG's performance is compared to peers like Colgate-Palmolive (CL)

Procter & Gamble (PG) faces margin pressure from rising costs, expecting a $1.4B after-tax earnings headwind in fiscal 2027. Despite productivity initiatives, Q1 EPS is forecast to decline 5%. Competitors Colgate-Palmolive (CL) and Clorox (CLX) are also implementing cost-saving measures. PG's stock is up 1.7% in 3 months, trading at a forward P/E of 20.72X.

Johnson & Johnson (JNJ) surged 35% YTD, driven by oncology and immunology wins, with Q2 2026 sales of $25.3B. Coca-Cola (KO) rose 28%, while Procter & Gamble (PG) lagged with a 4% gain. JNJ raised full-year EPS guidance to $11.50-$11.65. Defensives underperformed the S&P 500 (SPY) but JNJ and KO outperformed.

Procter & Gamble (PG) raised its dividend for 70 consecutive years, with fiscal 2026 free cash flow of $15.835B. Coca-Cola (KO) reported 5% unit case volume growth, its strongest in 17 years. Colgate-Palmolive (CL) saw 16.12% YTD stock growth and raised its dividend. All three companies demonstrated recession-resilient cash flows and dividend increases.

Canada imposed 25-50% tariffs on U.S. paper products, including toilet paper, in response to U.S. tariffs on Canadian goods. Procter & Gamble (P&G) expects a $0.25-per-share earnings hit and plans price increases. Canada supplied $328M of toilet paper to the U.S. in 2024, with Canadian pulp crucial for U.S. production. U.S. consumers bear 96% of tariff costs, per Fed research.

Moody’s affirmed Procter & Gamble’s (PG) ratings and changed the outlook to positive, citing strong cash flow, earnings growth, and stable credit metrics. The upgrade reflects P&G’s ability to generate positive free cash flow and earnings growth through pricing, innovation, and cost savings. Moody’s expects leverage to rise slightly due to the Thorne acquisition but return to low levels through optimization. The ratings could be upgraded if P&G maintains its strong operating profile and profitab