RBC cuts P&G, not convinced by turnaround plan
(Reuters) - RBC Capital Markets downgraded Procter & Gamble Co (PG.N) to "sector perform" from "outperform," expressing doubts over the management's ability to execute a recent plan to cut costs and drive growth for its key businesses.
The downgrade comes after the world's largest household products maker lowered its growth forecasts last week for the second time in two months and unveiled plans to cut costs and focus on its core businesses.
"We no longer have the conviction that PG can pull this off with near flawless execution," RBC analyst Jason Gere wrote in a note titled 'Too Much Gamble, Not Enough Procter.'
"On paper, it sounds right and we agree with management's decision to focus on the core but we aren't certain that we have seen the end of missteps over the next year."
Rocky economic conditions and a stronger dollar will continue to hamper P&G's sales growth, and may force the maker of Tide laundry detergent and Gillette razors to reduce prices or increase promotions, said Gere, who cut his price target on the stock to $64 from $70.
P&G shares were down slightly at $59.15 in premarket trade. They closed at $59.27 on Tuesday on the New York Stock Exchange.
(Reporting by Ranjita Ganesan; Editing by Viraj Nair)
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