UBS has reaffirmed its "Buy" rating on Procter & Gamble and maintained its $172 price target. The bank expects the company to report first-quarter fiscal 2027 earnings per share of $1.85 when it releases results on October 22, slightly below the consensus estimate of $1.89.
Although rising costs continue to pressure profits, UBS believes P&G's full-year organic sales growth target remains achievable as U.S. consumer demand keeps improving.
U.S. Consumption Growth Accelerates, Revenue Performance May Improve
UBS data shows that P&G's U.S. market consumption growth reached 4.4% during the 13 weeks ended October 3, up from 3.3% in the fourth quarter of fiscal 2026.
The bank believes the mismatch between shipment volumes and end-consumer consumption growth seen last quarter is unlikely to repeat to the same degree this quarter. This means improving end demand could be reflected more directly in the company's sales performance.
Separately, Evercore ISI recently upgraded P&G from "In Line" to "Outperform" and raised its first-quarter organic sales growth forecast to about 3%, above the market expectation of 2%.
Cost Pressure Persists, Full-Year Earnings Guidance May Skew Toward Lower End of Range
UBS noted that rising costs facing the household and personal care industry could affect P&G's profit performance. If inflationary pressure persists, management may emphasize the lower end of the full-year earnings per share guidance range in its earnings report.
However, UBS believes P&G's current valuation is broadly in line with its historical average, and with sales growth momentum improving, the stock could still outperform the market.
The options market currently expects P&G shares to move about 2.6% following the earnings release.
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