Investing.com -- RBC Capital Markets upgraded Procter & Gamble (NYSE:PG) Co stock to "Outperform" from "Sector Perform" saying the recent pullback in stock a buying opportunity.

Brokerage added that the earnings reset and long-term strategic investments position it well despite near-term challenges.

RBC also raised its price target on P&G stock to $177 from $164 per share.

P&G faced a tougher-than-expected recent quarter due to a global economic slowdown, retailers cutting back on inventory, and new tariffs impacting costs. P&G cut its fiscal 2025 outlook given these headwinds.

Analysts believe the company’s new, reduced targets are now more realistic and achievable.

“While the quarter had its challenges, we believe this was a clearing event for PG, materially cutting numbers while protecting investments needed for sustainable long term growth,” analysts at RBC said.

New tariffs, particularly on goods sourced from China, were noted as having a substantial cost impact.

The maker of Tide detergent and Pampers diapers now expects annual sales growth of around 2%.

Despite these near-term challenges, RBC expressed strong confidence in P&G’s management team and its long-term strategy.

The bank highlighted the company’s commitment to investing in innovation and brand support, even in a difficult consumer environment, as a key strength.

"We are believers of the PG strategy and believe it has the right management team and capabilities... to deal with the complexity and dynamic nature of the environment," RBC stated.

The bank adjusted its own long-term growth forecasts for P&G upward, contributing to the increased price target, and believes the company is well-positioned to navigate market volatility.

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