Why Procter & Gamble Is Better Suited For Inflation

Procter & Gamble Co PG will benefit from investors being able to distinguish between companies that have emerged stronger from the COVID-19 pandemic and those which simply received a short-term boost from the pandemic conditions, according to Truist Securities.

The Procter & Gamble Analyst: Bill Chappell upgraded the rating for Procter & Gamble from Hold to Buy, while raising the price target from $165 to $175.

The Procter & Gamble Thesis: Procter & Gamble has not only emerged stronger from the pandemic but also its focus on product superiority and consumers has “accelerated migration to trusted brands over the past two years,” which is likely to help the company during the current inflationary environment, Chappell said in the upgrade note.

“We note that since the start of the pandemic, P&G’s stock has been up 23%, only slightly ahead of the consumer staples index (XLP) performance of 20% and well below the S&P 500 performance of 39%,” the analyst wrote.

“As the consumer behavior patterns return to a 'new normal,' investors will once again be able to see PG’s operating momentum, and we believe the stock will therefore restart its period of outperformance,” he added.

PG Price Action: Shares had risen by 0.31% to $151.18 at the time of publication Tuesday morning.

Photo: Courtesy Procter & Gamble