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Wells Fargo analyst raises Procter & Gamble rating

NEW YORK (AP) -- A Wells Fargo analyst boosted Procter & Gamble's rating on Tuesday, saying a recent leadership change and cost-cutting efforts should help to improve the consumer product maker's business.

Procter & Gamble — whose products include Tide detergent and Crest toothpaste — has been working on a turnaround effort aimed at focusing on its top 40 top businesses, 20 biggest new products and 10 most profitable emerging markets. It wants to reduce costs to save $10 billion by fiscal 2016.

Chris Ferrara of Wells Fargo said that even though some may be skeptical about A.G. Lafley being reinstalled as the consumer product company's CEO, the change can make a difference. Lafley retook the helm at Procter & Gamble in May after serving as CEO from 2000 to 2009. He replaced Bob McDonald.

"We believe that even if the basic strategy is similar, leadership at the top matters, particularly for such a complex, sprawling organization as Procter & Gamble," Ferrara said in a note to clients.

Ferrara raised Procter & Gamble Co. to "Outperform" from "Market Perform."

Ferrara said that the company has been over-delivering on cost savings and is ahead of schedule on plans to trim its workforce.

"We believe this pace can continue as long as Procter & Gamble can show discipline," the analyst said.

Shares of the company added $1.05 to $76.70 in midday trading. The stock is up about 13 percent this year.