Procter & Gamble (PG)

The Procter & Gamble Company (PG) - Procter & Gamble's management is committed to a growth strategy based on (1) driving volume through product innovation and increasing penetration into developing markets and (2) expanding profitability by focusing on higher margin categories.

The plan is meeting with success in terms of top-line expansion, volume growth, and higher earnings. Though the Gillette acquisition was accretive to earnings in fiscal 2008, the gross margin was negatively impacted by increased commodity and energy costs.

Taking advantage of recent market weakness that drove P&G's stock to an attractive valuation level, the stock was upgraded to a Buy. The target price of $72.50 is based on a 20 P/E on trailing 12-month earnings.