We are downgrading our stance from a Buy to a Hold on PG plc with a 12-month price target of €2.00 from our previous target of €2.11.

Although PG registered an improved financial performance for FY20, the decline in our price target is mainly attributable to the implications brought about by the COVID-19 pandemic on the Group, more specifically in terms of PG’s retail mall and franchise operations.

In relation to the Group’s supermarket operations, management confirmed that other than incurring higher costs, this segment was not materially impacted. In line with company projections for FY21, we are factoring in a 3% and a 5% revenue increase from Pama and Pavi shopping villages respectively.

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