Evercore ISI Downgrades Procter & Gamble to Market Perform, Cuts Price Target to $170

Evercore ISI downgraded The Procter & Gamble Company (NYSE:PG) from Outperform to Market Perform and reduced the price target from $190 to $170. The conservative outlook comes ahead of Q4 earnings call on July 29. The analyst expects fiscal 2026 organic sales growth between 1% and 3%, below market consensus of 2.4%. The shift to Amazon and adverse retail channels may limit sales growth and constrain earnings growth.

Evercore ISI has downgraded The Procter & Gamble Company (NYSE: PG) from "Outperform" to "Market Perform" and reduced the price target from $190 to $170, ahead of the company's Q4 earnings call on July 29. The conservative outlook is based on expectations that Procter & Gamble will report fiscal 2026 organic sales growth between 1% and 3%, below the market consensus of 2.4% [1].

Analysts at Evercore ISI cited several factors contributing to the downgrade, including the shift towards Amazon and adverse changes in retail channels. Amazon now accounts for 50% of growth in the U.S. household and personal care market, leading to a significant growth gap between Amazon and Procter & Gamble's core retailers like Walmart and Costco [2]. The company's complex product portfolio and limited presence in high-growth online segments have made it harder to compete with smaller, nimbler brands in the digital marketplace [3].

The downgrade also reflects macroeconomic pressures and portfolio optimization efforts, which are expected to result in a 50 basis points loss in the fiscal year 2026 guidance. While Procter & Gamble's product portfolio has expanded to include mid-tier competitive brands in price-sensitive categories, these efforts may not be sufficient to mitigate the challenges posed by the retail environment and competitive pressures [4].

Investors should closely monitor Procter & Gamble's upcoming earnings report and guidance for the new fiscal year. The company's performance and outlook will be crucial in determining whether the downgrade by Evercore ISI is justified. If Procter & Gamble's guidance falls short of expectations, it could further impact investor sentiment and the company's stock price. Conversely, if the company provides a more optimistic outlook, it could help to stabilize or even improve its stock performance.

References:
[1] https://www.ainvest.com/news/procter-gamble-downgraded-evercore-isi-earnings-report-2507/
[2] https://www.ainvest.com/news/15min-chart-sees-macd-death-cross-kdj-death-cross-2507/
[3] https://www.investing.com/news/stock-market-news/evercore-cuts-procter--gamble-rating-on-weak-amazon-positioning-slowing-sales-4133975
[4] https://www.ainvest.com/news/procter-gamble-downgraded-evercore-isi-earnings-report-2507-98/