TD Cowen has downgraded Procter & Gamble (P&G) to Hold, citing a slow recovery in organic sales over the next one to two years. The firm anticipates approximately 2% organic growth in fiscal years 2026 and 2027. This is due to constrained pricing, challenges in regaining competitiveness, and pressure on the U.S. Hispanic consumer market, impacting P&G's ability to boost sales.

Investor optimism regarding P&G hinges on the belief that organic sales growth bottomed out in the second quarter. However, muted pricing strategies, with promotions up 270 basis points, are a headwind. P&G is also facing increased competition, leading to consumer shifts in key categories. Management aims for product improvements over price hikes.

Furthermore, TD Cowen pointed out the pressure on Hispanic consumers. Tighter U.S. immigration policies could negatively impact economic confidence and spending among this demographic, which tends to favor baby care and household cleaning products. The firm has raised its price target to $156.

This downgrade reflects broader challenges facing P&G, including shifts in consumer behavior and the move towards e-commerce. The company is restructuring its analytical tools, but progress is expected to be gradual. Weighted market share has declined in key areas like laundry and skincare, signaling the need for strategic adjustments.