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Although Procter & Gamble’s guidance for the current quarter fell short of estimates, one analyst said the Street is "sort of blowing it off," as investors look to see if the traditionally insular company can adjust its growth strategy successfully.
"We've seen a couple of companies do this already this earnings season — Coke being one, Clorox being another," said John Faucher, a senior analyst at JPMorgan. "And the markets tended to look past it, even with some pretty sizeable negative revisions — so a little disappointing but not a surprise that the market’s sort of blowing it off here.”
On Thursday, the company posted a higher-than-expected quarterly profit despite a drop in growth in developed markets, which account for 60 percent of its sales. It also faces obstacles, such as mandated price cuts in Venezuela and import curbs in Argentina, in some emerging markets.
P&G is the latest company to guide its forecast for the quarter down.
Faucher has an “overweight” rating on the company’s stock.
While Faucher said generating organic growth is a key concern for companies such as P&G, he thinks the bigger question (and worry) is whether or not the company has the correct focus on the right regions and categories.
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