The firm said it raised its rating on the consumer packaged goods company as it believes Procter & Gamble is improving its operating efficiency, while facing currency and commodity headwinds.
Credit Suisse raised its price target on Procter & Gamble stock to $105 from $95.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
Shares of Procter & Gamble are higher by 0.91% to $90.82 in pre-market trading this morning.
Separately, TheStreet Ratings team rates PROCTER & GAMBLE CO as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate PROCTER & GAMBLE CO (PG) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, expanding profit margins, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Net operating cash flow has significantly increased by 77.73% to $3,633.00 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 62.25%.
- The gross profit margin for PROCTER & GAMBLE CO is rather high; currently it is at 53.60%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 9.57% trails the industry average.
- The current debt-to-equity ratio, 0.50, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that PG's debt-to-equity ratio is low, the quick ratio, which is currently 0.53, displays a potential problem in covering short-term cash needs.
- PROCTER & GAMBLE CO's earnings per share declined by 34.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, PROCTER & GAMBLE CO increased its bottom line by earning $3.98 versus $3.87 in the prior year. This year, the market expects an improvement in earnings ($4.38 versus $3.98).
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 1.3%. Since the same quarter one year prior, revenues slightly dropped by 0.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- You can view the full analysis from the report here: PG Ratings Report