Procter & Gamble's (PG) revised guidance for fiscal 2025 embeds "realistic and achievable" assumptions following a difficult fiscal third quarter, RBC Capital Markets said in a note Friday.

The company now expects fiscal 2025 core earnings per share of $6.72 to $6.82, down from its previous range of $6.91 to $7.05. RBC said it had anticipated a tough earnings season and was specifically looking for companies to make significant cuts to earnings forecasts.

The brokerage said that while the quarter was challenging, hit by global macroeconomic softness, inventory destocking, and tariffs, it views the results as a "clearing event" that resets expectations while preserving long-term investment priorities.

Despite near-term pressures, RBC expressed confidence in the company's strategy and leadership, citing the company's strengths in areas like innovation, supply chain agility, and revenue growth management. It also highlighted Procter & Gamble's ongoing investment commitment, which the firm sees as essential in a tough consumer environment.

The firm lowered its fiscal 2025 and 2026 EPS forecasts for Procter & Gamble and slightly trimmed organic growth expectations. However, it raised its long-term growth outlook for fiscal 2027 and beyond, citing expected benefits from brand investments and productivity improvements.

RBC upgraded the company to outperform from sector perform and raised its price target to $177 from $164.

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