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Procter & Gamble (PG) Gains But Lags Market: What You Should Know

Zacks Equity Research
·3 mins read

In the latest trading session, Procter & Gamble (PG) closed at $144.49, marking a +1.1% move from the previous day. The stock lagged the S&P 500's daily gain of 1.64%. Meanwhile, the Dow gained 0.88%, and the Nasdaq, a tech-heavy index, added 2.56%.

Coming into today, shares of the world's largest consumer products maker had gained 4.55% in the past month. In that same time, the Consumer Staples sector gained 1.62%, while the S&P 500 gained 2.44%.

Investors will be hoping for strength from PG as it approaches its next earnings release, which is expected to be October 20, 2020. On that day, PG is projected to report earnings of $1.42 per share, which would represent year-over-year growth of 3.65%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $18.25 billion, up 2.51% from the year-ago period.

PG's full-year Zacks Consensus Estimates are calling for earnings of $5.41 per share and revenue of $72.95 billion. These results would represent year-over-year changes of +5.66% and +2.82%, respectively.

Any recent changes to analyst estimates for PG should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.19% higher. PG currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that PG has a Forward P/E ratio of 26.43 right now. This represents a premium compared to its industry's average Forward P/E of 24.95.

It is also worth noting that PG currently has a PEG ratio of 4.04. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Soap and Cleaning Materials industry currently had an average PEG ratio of 3.98 as of yesterday's close.

The Soap and Cleaning Materials industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 105, which puts it in the top 42% 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.

To follow PG in the coming trading sessions, be sure to utilize Zacks.com.


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Zacks Investment Research