The morning laggards of Monday were The Coca-Cola Co(NYSE:KO) and Procter & Gamble Co. (NYSE:PG) both players of the Dow Jones Industrial Average (DJIA) declining almost 1% in early session, thanks to Goldman Sachs analysts who turned harsh on the consumer staples tycoons.
Expert Judy Hong lowered ratings of Coke to sell, following being at neutral for more than three years, referring to predictions of that 2017 sales would enhance at a lethargic pace than the international non-alcoholic beverage market, and the belief the greenback’s robustness could confine earnings growth. She lowered her stock price target to $39, which is 5.8% lower than present levels of $41.
Another expert Jason English took shot at P&G to sell, following also being at neutral for more than three years, referring to issues regarding valuation and that revenue growth may have sickly-looking. He lowered his stock price target to $77, which remains now at 8.7% lower than current levels, previously $86.
Hong kept a Neutral rating on beverages generally, but assumes the “haves” and the “have-nots” to enhance farther distant, as the ex-group advantages from support, secular growth, and Mergers and takeovers, while the latter does not, and has to cope with foreign exchange hurdles.
English reported that P&G’s price-to-earnings ratio of 21.6 is close to a decade peak, and at a 10% premium to the firm’s home and personal care opponents. P&G’s stock has moved up 11% over the last one year, while Coke shares have shed 0.4%, the SPDR Consumer Staples Select Sector ETF XLP, has pinned on 5.5% and the Dow has moved up 22%.