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

Zacks Equity Research

Procter & Gamble (PG) closed at $122.76 in the latest trading session, marking a -0.37% move from the prior day. This move lagged the S&P 500's daily gain of 1.3%. At the same time, the Dow added 1.41%, and the tech-heavy Nasdaq gained 1.75%.

Heading into today, shares of the world's largest consumer products maker had gained 6.66% over the past month, outpacing the Consumer Staples sector's gain of 1.77% and the S&P 500's gain of 0.46% in that time.

PG will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $1.24, up 10.71% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $17.49 billion, up 4.82% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.84 per share and revenue of $70.36 billion. These totals would mark changes of +7.08% and +3.96%, respectively, from last year.

It is also important to note the 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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. PG is holding a Zacks Rank of #2 (Buy) right now.

In terms of valuation, PG is currently trading at a Forward P/E ratio of 25.44. This represents a premium compared to its industry's average Forward P/E of 24.33.

Investors should also note that PG has a PEG ratio of 3.58 right now. 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 4.27 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 83, which puts it in the top 33% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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