Procter & Gamble Cut to “Market Perform” at Wells Fargo (PG)

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Consumer products maker The Procter & Gamble Company ( PG ) caught a big downgrade from analysts at Wells Fargo on Monday.

The firm said it cut its rating on PG from "Outperform" to "Market Perform," noting the company lacks near-term catalysts. Wells Fargo also lowered its price target range from $67-71 to $64-67. P&G shares closed at $64.28 on Friday.

A Wells Fargo analyst noted he made the move "…after organic sales and market share lag primary competitors. Material upside catalysts lacking until the company can demonstrate a sustained ability to execute operating margin expansion (i.e., at least two consecutive quarters of operating margin progress), in our view. While management continues to make needed investments in D&E markets for the long-term growth of the company, the expected near-term catalyst for P&G shares from improving operating margins (driven largely by the company's core business in developed markets) continues to be elusive."

Accordingly, the firm also cut its earnings estimates for the company through 2014.

Procter & Gamble shares fell 61 cents, or -1%, in premarket trading Monday.

The Bottom Line
Shares of Procter & Gamble ( PG ) have a 3.50% dividend yield, based on Friday's closing stock price of $64.28. The stock has technical support in the $62-$64 price area. If the shares can firm up, we see overhead resistance around the $68-$70 price levels.

The Procter & Gamble Company ( PG ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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