LONDON (ShareCast) - Goldman Sachs downgraded PZ Cussons to 'neutral' from 'buy', noting that the stock has outperformed the sector by 14% in the year to date.
Since being added to Goldman's buy list on 12 November 2013, the shares are down 5.4% versus a flat FTSE World Europe, the bank said.

Still, GS said that Cussons remains a strategic asset with market-leading positions in key growth markets. Over the medium-term, it expects mergers and acquisitions to drive ongoing mix benefits from expansions into higher growth/margin categories.

"Performance in the UK has remained strong in the context of a challenging retail environment as the company diversifies its channels outside the retail big four," said GS.

It added that acquisitions have been core to the company's performance in Asia, which the bank expects to continue.

Although it is cautious on the short-term outlook in Nigeria as consumer spending is still likely to be muted from inflation and limited wage growth, it said the long-term opportunities for the market are compelling.

GS has a 370p price target on the stock.

At 11:21, PZ Cussons shares were down 1.3% at 360.30p.

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