Procter & Gamble (PG) is up about 3% so far this year, putting it behind the S&P 500. However, on Oct. 6, 2026, Evercore ISI upgraded Procter & Gamble from In Line to Outperform and raised its price target to $166 from $161.
The new target points to about a 14% increase from the stock’s close on Oct. 5. After investors heard news of the upgrade, PG shares rose between 1.5% and 2% in afternoon trading.
This is the first time Evercore has given P&G a clear bullish rating since the firm became cautious about the stock back in mid-2025. Evercore turned cautious because it noticed P&G underperforming across the Amazon channel.
P&G’s Amazon market share was only about a third of what it held at Walmart and Costco, even as Amazon drove roughly half of U.S. HPC growth.
Investors are now wondering why Evercore has changed its mind about the stock.
The Procter & Gamble cost problem Evercore flagged
Before the upgrade, one of the biggest reasons Evercore stayed on the sidelines was that P&G was being squeezed on costs.
Oil prices had been climbing, which pushed up the price of plastic packaging that P&G uses — for example, Tide bottles, Pantene shampoo containers, and Pampers packaging, according to a Reuters report on U.S. News.
Shipping and freight rates were also moving higher, which meant it was becoming more expensive for the company to move finished products from its factories to retailers like Walmart, Costco, and Target.
On top of that, tariff-related expenses added another layer to the input cost base. All of these costs emerged at the same time, and P&G had not fully baked them into the guidance it gave investors earlier in the year.
The reason this mattered so much to analysts is that P&G sells products at relatively fixed shelf prices, and retailers tend to push back when suppliers try to raise prices too quickly. So when raw materials and shipping get more expensive, the company either absorbs the hit on its margins or risks losing shelf space to cheaper rivals if it passes the cost on.
Evercore’s earlier concern was that this cost pressure, combined with the Amazon channel issue, could cap sales growth below the 4% level the firm sees as the threshold for operating leverage.
That is the backdrop against which the latest upgrade must now be understood.
Why Evercore became bullish on P&G after 15 months on the sidelines
Robert Ottenstein is the analyst behind the call. He has covered consumer staples at Evercore ISI for more than a decade, and his past calls on names including Coca-Cola and Diageo have made him well known to investors in the sector.
Ottenstein’s main reason for upgrading the stock is that P&G has stopped losing ground online.
In 2025, the company had been losing e-commerce share on Amazon, and because each brand brings in so much money, when its products don’t get as much visibility on the platform, it affects the company’s overall revenue.
Evercore now says P&G is “structurally no longer losing U.S. e-commerce market share,” CNBC reported.
Ottenstein raised his first-quarter fiscal 2027 organic sales growth estimate to 3%, which is a full point above the Wall Street consensus of 2%. He expects P&G to end fiscal 2027 with close to 4% growth, and he called the upcoming quarter the “end of downside risk” for P&G’s top-line sales, Investing.com reported.
He also said Procter & Gamble’s U.S. category volumes increased by 40 basis points from the last quarter, which means more households are now buying more units of P&G products, CNBC reported.
Growth that is led by actual volume is usually stronger and more lasting than growth that comes from price hikes.
P&G’s higher-margin brands are also contributing more to the company’s revenue. Olay, Downy, Native, Dawn, and Pantene are growing faster than franchises like Pampers, which raises the company’s overall profit mix.
What the reset means for dividend investors
P&G is one of the oldest Dividend Kings around. The company marked its 70th straight year of increasing its dividend in April 2026, as shown in its SEC filing, putting it ahead of peers like Johnson & Johnson, which is still in the 60s range of consecutive dividend increases.
The stock currently has a dividend yield of about 2.9%.
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If the company’s organic sales growth actually climbs back to 4% by the end of fiscal 2027, as Ottenstein expects, paying approximately $10 billion in annual dividends will be understandable.
P&G will also be able to justify its ongoing share buybacks. And that outcome is actually what most retirees and conservative investors who only want steady income are hoping for.
Where the P&G thesis could still face pressure
Evercore pointed out a few risks that are worth paying attention to: rising oil and shipping costs.
These costs matter to the company’s guidance because higher oil prices increase the cost of plastic packaging, and higher shipping rates increase the cost of moving products to retail stores. If P&G cannot pass those costs on to retailers, its profit margins could be affected.
The broader market is another factor to consider. If the AI rally continues, P&G may still remain behind the main index even if its own business improves.
The company’s next test is whether it can actually achieve the stronger sales growth Evercore expects over the next two or three quarters.
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