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Procter & Gamble (PG) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

Procter & Gamble (PG) closed the most recent trading day at $122.01, moving -0.6% from the previous trading session. This move lagged the S&P 500's daily loss of 0.28%. At the same time, the Dow lost 0.42%, and the tech-heavy Nasdaq lost 0.03%.

Heading into today, shares of the world's largest consumer products maker had lost 1.7% over the past month, lagging the Consumer Staples sector's gain of 2.4% and the S&P 500's gain of 3.31% in that time.

Wall Street will be looking for positivity from PG as it approaches its next earnings report date. This is expected to be January 23, 2020. In that report, analysts expect PG to post earnings of $1.37 per share. This would mark year-over-year growth of 9.6%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $18.32 billion, up 5.07% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.94 per share and revenue of $70.45 billion, which would represent changes of +9.29% and +4.09%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for PG. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. PG is currently sporting a Zacks Rank of #2 (Buy).

In terms of valuation, PG is currently trading at a Forward P/E ratio of 24.83. This valuation marks a premium compared to its industry's average Forward P/E of 21.26.

Meanwhile, PG's PEG ratio is currently 3.33. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Soap and Cleaning Materials was holding an average PEG ratio of 3.33 at yesterday's closing price.

The Soap and Cleaning Materials industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 223, which puts it in the bottom 13% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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