Bank of America analyst Christopher Ferrara upgraded Procter & Gamble (PG) to Buy from Neutral today and raised his price target to $75.
Ferrara writes that P&G’s commitment to make $10 billion in cuts by Fiscal 2016 represents a more serious move than the company’s past cost-cuttingÂ statements.
“While thereÂs been reason to question PGÂs ability to deliver savings, committing to such a large target represents change, in our view. The market often questions PGÂs appetite or ability to cut costs, but rarely doubts the fact that there is actually fat to cut.”
P&G could find it difficult, however, to keep growing and innovating amid the cuts.
“Further, trying to drive savings while sustaining focus on innovation and growth has never been easy at PG, and represents perhaps the biggest risk to the story.”