P&G shares were 0.9% higher at $61.12 in early afternoon trading Monday, even as the major indices tumbled around 3% following an unprecedented downgrade to the U.S. government's AAA credit rating by Standard & Poor's on Friday. A few other blue-chip consumer staple stocks, including Hershey (HSY), PepsiCo (PEP), General Mills (GIS) and Kimberly-Clark (KMB), managed to trade closer to the unchanged mark, but P&G was the only one of these S&P 500 components trading higher.
Analysts at Bernstein Research upgraded the consumer goods maker to outperform from market perform, and raised their price target on the stock to $72 from $69, following P&G's better-than-expected fourth-quarter earnings report on Friday.Bernstein analyst Ali Dibadj conceded that while he's been critical of P&G's "poor" performance of late, he is coming around to management's realization that "it needs to conduct a sizeable restructuring to help fund its now appropriate (we believe) expansion strategy."
He expects between $2 billion and $5 billion in restructuring over the coming years. "Of course, there is no certainty as to whether P&G will address its 'Several Billion Dollar Opportunity' in terms of costs or do so with as much alacrity or ambition as we would like, but we do believe that the conditions/probabilities are right, now more than ever, for the company to go after it," Dibadj noted.
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