Analysts on "Wall Street Week" recommends PFE, LLY and WLA
PaineWebber's Shore Recommends Procter & Gamble on 'Rukeyser'
Bloomberg News
May 29, 1998, 8:23 p.m. PT
PaineWebber's Shore Recommends Procter & Gamble on 'Rukeyser'
Owings Mills, Maryland, May 29 (Bloomberg) -- Procter &
Gamble Co. will be a strong stock in coming years, said Andrew
Shore, managing director at PaineWebber Inc., on Public
Broadcasting System's ''Wall Street Week With Louis Rukeyser''
program.
Shore, an analyst who follows consumer non-durable
companies, said Cincinnati-based P&G is so strong he would ''use
it to fund'' his 13-month-old daughter's education. The company,
he said, has ''the best brands, the best management'' and is the
most dominant of its peers in terms of market share.
Other companies Shore recommended were Avon Products Inc.
and Colgate-Palmolive Co. Both are producing accelerating
earnings growth and Colgate is being run by ''the best CEO in the
business,'' Reuben Mark, Shore said.
Procter & Gamble and Colgate will benefit from new products,
such as P&G's Fat Free Pringles potato chips, which Shore
estimates will be a $150 million product in a year, and Colgate's
Total toothpaste -- ''the best new toothpaste on the market.''
One company with a great product whose stock won't rise
rapidly is Gillette Co., Shore said. Gillette's Mach3 razor is a
''$1 billion product,'' Shore said. Still, the stock is ''almost
a victim of its own success,'' he said.
Gillette's stock is up 16.61 percent this year and has an
price-to-earnings ratio of 39.73, based on estimated 1998
earnings. By comparison, Avon's shares are up 33.30 percent this
year and the company has a price-to-earnings ratio of 27.48.
Procter & Gamble shares have risen 5.09 percent this year and the
company has a price-to-earnings ratio of 32.59, based on
estimated earnings for fiscal 1998, ending in June.
Shore also defended a recent cut in his recommendation on
Sunbeam Corp. to ''neutral'' from ''buy.''
''I think its going to be very difficult to turn around
Sunbeam under present management,'' he said. Chairman and Chief
Executive Al Dunlap has downsized too far and the company would
be better off with a leader who has a ''strong consumer non-
durable background'' and realizes Sunbeam doesn't have 15 percent
to 20 percent margins, Shore said.
Among the program's panelists, Martin Zweig, managing
director of Zweig-Dimenna Partners LP, recommended Warner-Lambert
Co., as did Liz Ann Sonders, managing director at Avatar
Associates.
Sonders said she also saw value in Eli Lilly & Co. and
Pfizer Inc. She said Pfizer's impotence drug Viagra faces little
threat from a similar drug being developed by Icos Corp. because
the latter probably won't be on the market for a year.
--Courtney Schlisserman in the New York newsroom (212) 318-2300 |
