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Procter & Gamble (PG) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

Procter & Gamble (PG) closed the most recent trading day at $121.13, moving +1.15% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.26%. At the same time, the Dow added 0.13%, and the tech-heavy Nasdaq gained 0.4%.

Heading into today, shares of the world's largest consumer products maker had lost 0.41% over the past month, lagging the Consumer Staples sector's gain of 1.1% and the S&P 500's gain of 3.92% in that time.

PG will be looking to display strength as it nears its next earnings release. On that day, PG is projected to report earnings of $1.24 per share, which would represent year-over-year growth of 10.71%. Meanwhile, our latest consensus estimate is calling for revenue of $17.49 billion, up 4.82% from the prior-year quarter.

PG's full-year Zacks Consensus Estimates are calling for earnings of $4.84 per share and revenue of $70.36 billion. These results would represent year-over-year changes of +7.08% and +3.96%, respectively.

It is also important to note the recent changes to analyst estimates for PG. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

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.

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. The Zacks Consensus EPS estimate remained stagnant within the past month. PG currently has a Zacks Rank of #2 (Buy).

In terms of valuation, PG is currently trading at a Forward P/E ratio of 24.72. This represents a premium compared to its industry's average Forward P/E of 22.84.

It is also worth noting that PG currently has a PEG ratio of 3.48. 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 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 group has a Zacks Industry Rank of 193, putting it in the bottom 25% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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