2 Sell-Side Reactions To The Nelson Peltz-Procter & Gamble Proxy Play

Activist investor Nelson Peltz shocked Procter & Gamble Co PG investors after his Trian Partners won a vote recount for a board seat on Wednesday by 43,000 votes.

P&G acknowledged the victory in a statement on Wednesday.

“The results are still preliminary and are subject to a review and challenge period during which both parties will have the opportunity to review the results for any discrepancies,” the statement said.

The recount results took Wall Street analysts by surprise as well. P&G is a better company with Peltz on board, said Bernstein analyst Ali Dibadj. 

“Our view remains that if Peltz ultimately wins, it will be good for the stock,” Dibadj said in a Wednesday note. (See Dibadj's track record here.)

Bernstein is in favor of Peltz pushing P&G to streamline its operations, but a breakup may be a more efficient way of unlocking the company’s full value, the analyst said. 

Tigress Financial analyst Ivan Feinseth said Petz’s addition to the board is a “significant” positive for the stock.

“I believe he would be a catalyst for of change for to streamline operations and emphasize stronger brands and divestiture of weaker ones,” Feinseth said Thursday. (See Feinseth's track record here.)

Procter & Gamble stock jumped 1.3 percent Thursday following news of a potential vote reversal. Trian owns $3.5 billion in P&G stock.

Bernstein maintains an Outperform rating and $101 price target for P&G stock. Tigress Financial has a Neutral outlook for P&G.

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Photo courtesy of Procter & Gamble.