Sell Dow Stocks Coke And Procter & Gamble, Says Goldman Sachs

By Tomi Kilgore Markets MarketWatch Pulse

The stocks of Coca-Cola Co. and Procter & Gamble Co. , both components of the Dow Jones Industrial Average , both slumped about 1% in morning trade Monday, after Goldman Sachs analysts turned bearish on the consumer staples giants. Analyst Judy Hong downgraded Coke to sell, after being at neutral for over three years, citing expectations of that 2017 sales will grow slower than the global non-alcoholic beverage market, and the belief the dollar's strength could restrain earnings growth. She cut her stock price target to $39, which is 5.8% below current levels, from $41. Analyst Jason English downgraded P&G to sell, after also being at neutral for over three years, citing concerns over valuation and that sales growth may have peaked. He cut his stock price target to $77, which is 8.7% below current levels, from $86. English said P&G's price-to-earnings ratio of 21.6 is near a decade high, and at a 10% premium to the company's home and personal care peers. P&G's stock has run up 11% over the past 12 months, while Coke shares have lost 0.4%, the SPDR Consumer Staples Select Sector ETF has tacked on 5.5% and the Dow has surged 22%.

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