Procter & Gamble price target raised to $165 from $155 at Bernstein

Bernstein raised the firm’s price target on Procter & Gamble to $165 from $155 and keeps a Market Perform rating on the shares. Over the past year, P&G has seen an incredibly strong gross margin rebound, driven by a combination of solid pricing benefits and the eventual flow-through of commodity weakness to the P&L. However, much of this recovery has been offset by strong re-investment, somewhat muting the bottom-line impact, the firm says. This dynamic shifted materially in Q2, which saw a big jump in operating margin expansion, which makes Q2 very close to being an all-time high margin quarter, Bernstein argues. This “flow-through” of gross margin strength led to a big beat on Wednesday, with EPS up 8% ahead of consensus.