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

Zacks Equity Research
Glacier Bancorp (GBCI) delivered earnings and revenue surprises of 3.28% and -0.33%, respectively, for the quarter ended June 2019. Do the numbers hold clues to what lies ahead for the stock?

In the latest trading session, Procter & Gamble (PG) closed at $106.73, marking a +1.96% move from the previous day. This change outpaced the S&P 500's 0.82% gain on the day. Meanwhile, the Dow gained 0.82%, and the Nasdaq, a tech-heavy index, added 0.64%.

Coming into today, shares of the world's largest consumer products maker had lost 0.02% in the past month. In that same time, the Consumer Staples sector lost 2.05%, while the S&P 500 lost 4.58%.

Wall Street will be looking for positivity from PG as it approaches its next earnings report date. The company is expected to report EPS of $1.06, up 12.77% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $16.86 billion, up 2.14% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.48 per share and revenue of $67.45 billion. These totals would mark changes of +6.16% and +0.92%, respectively, from last year.

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. As a result, we can interpret positive estimate revisions as a good sign for 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.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. 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 23.38 right now. Its industry sports an average Forward P/E of 22.42, so we one might conclude that PG is trading at a premium comparatively.

Meanwhile, PG's PEG ratio is currently 3.37. 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 4 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 100, putting it in the top 40% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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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