Gillette Up on Upgrade

The shares get a boost one day after the company reiterates its long-term sales goals.
By Meredith Derby ,

Shares of

Gillette

(G) - Get Report

rose Friday after Prudential upgraded them and boosted its price target, saying a turnaround at the company is taking shape.

"The Gillette that was so admired in the early 1990s is starting to emerge again," said analyst Constance Maneaty in a research report. She citied a pipeline of Venus, M3Power and Sensor shaving products. "Duracell is acting more rational in a category that seems to be more disciplined," she added.

Maneaty thinks Gillette has seriously invested in launching new products maintaining existing franchises. As a result, she upped her rating on the company to overweight from neutral weight with a new price target of $46, up from $39.

The stock rose 31 cents, or 0.8%, to $38.08 Friday. The company reiterated late Thursday that it expects its sales to rise 3% to 5%, long-term.

The analyst added that she believes the company will increase advertising spending, as it ran ads during the Superbowl for the first time in 10 years. The company had spent 6.5% of sales on advertising in 2000, while it most recently spent at least 8.9% in 2003.

Maneaty boosted Gillette's 2004 EPS estimate to $1.53 from $1.49. In 2005, estimate EPS went to $1.74 from $1.66.

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