Procter & Gamble Reports Q1 Earnings Beat, But Analysts Highlight Ongoing Concerns Over China Impact

On Friday, Procter & Gamble Co (NYSE: PG) reported mixed results for its fiscal first quarter.

The company reported its results amid an exciting earnings season. Here are some key analyst takeaways.

DA Davidson On Procter & Gamble

Analyst Linda Bolton Weiser maintained a Neutral rating and raised the price target from $159 to $160.

Procter & Gamble reported quarterly sales of $21.737 billion, down 6% and below consensus of $21.977 billion, Bolton Weiser said in a note. Earnings came in at $1.93 per share, beating the consensus of $1.90 per share, backed by a lower tax rate and higher non-operating income versus expectations, she added.

Management maintained their sales and earnings guidance, the analyst stated. "PG believes organic sales growth should improve in F2H25 due to more innovation and annualizing the negative impacts (China, SK-II, Middle East) that started in F2H24," she further wrote.

Check out other analyst stock ratings.

RBC Capital Markets On Procter & Gamble

Analyst Nik Modi reiterated a Sector Perform rating and price target of $164.

Topline concerns heading into the print came to fruition due to the volatility of markets such as China and the Middle East," Modi wrote. He added that despite the sales miss, Procter & Gamble delivered flat gross margins, partially offset by commodity costs, product and package reinvestment, and currency impact.

The company's volume trajectory in many of its key markets remained strong, the analyst stated. "We believe the biggest debate for investors regarding guidance concerns whether PG can maintain performance in the 85% of sales base that is doing well given the macro drags on the remaining 15%," he further said.

Truist Securities On Procter & Gamble

Analyst Bill Chappell reiterated a Buy rating and price target of $175.

Procter & Gamble's results and call were broadly in-line with expectations, Chappell said. "The company faced continued weakness in China as SK-II sales dragged down sales 15% in China and 20% in company-level Skin Care," he wrote.

The analyst also stated that headwinds in the Middle East negatively impacted the quarter. Going by the latest results, Procter & Gamble appears on track to meet the midpoint of its full-year guide, and future volatility in results is likely to be "China-driven," he added.

PG Price Action: Shares of Procter & Gamble were down 1.56% to $168.60 at the time of publication on Monday.

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