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

Zacks Equity Research

Procter & Gamble (PG) closed at $124.88 in the latest trading session, marking a +0.73% move from the prior day. This change outpaced the S&P 500's 0.7% gain on the day. At the same time, the Dow added 0.29%, and the tech-heavy Nasdaq gained 1.04%.

Prior to today's trading, shares of the world's largest consumer products maker had lost 0.48% over the past month. This has lagged the Consumer Staples sector's gain of 3.14% and the S&P 500's gain of 4.38% 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. The company is expected to report EPS of $1.37, up 9.6% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $18.32 billion, up 5.07% from the year-ago period.

PG's full-year Zacks Consensus Estimates are calling for earnings of $4.94 per share and revenue of $70.45 billion. These results would represent year-over-year changes of +9.29% and +4.09%, respectively.

Investors might also notice recent changes to analyst estimates for PG. These revisions typically reflect the latest short-term business trends, which can change frequently. 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.

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

Looking at its valuation, PG is holding a Forward P/E ratio of 25.08. This represents a premium compared to its industry's average Forward P/E of 21.24.

Also, we should mention that PG has a PEG ratio of 3.36. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. PG's industry had an average PEG ratio of 3.36 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 243, which puts it in the bottom 5% 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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