CS First Boston Starts Gillette with Underperform

Analyst Lauren Lieberman likes the consumer-product maker's franchise, but sees slower-than-expected growth ahead

CS First Boston initiated coverage of Gillette (G ) with underperform.

Analyst Lauren Lieberman says she's setting a $38 12-month price target. She thinks Gillette owns the consumer sector's best brand franchise, and says management is executing well on its strategic plan. But she thinks the company's turnaround and growth prospects are more than reflected in the current share price.

Lieberman says by her estimates, investors expect the company's blade and razor division to produce industry-leading 12% operating profit growth over the next three to five years -- above her expectations for 11% intermediate-term growth. She notes that the often discussed battery unit accounts for only 7% of share value, according to her analysis.