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

Zacks Equity Research
Reliance Steel (RS) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.

Procter & Gamble (PG) closed the most recent trading day at $103.64, moving -0.39% from the previous trading session. This change lagged the S&P 500's daily gain of 1.16%. Meanwhile, the Dow gained 1.27%, and the Nasdaq, a tech-heavy index, added 1.29%.

Heading into today, shares of the world's largest consumer products maker had gained 5.58% over the past month, outpacing the Consumer Staples sector's gain of 3.99% and the S&P 500's gain of 1.92% 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 April 23, 2019. On that day, PG is projected to report earnings of $1.04 per share, which would represent year-over-year growth of 4%. Meanwhile, our latest consensus estimate is calling for revenue of $16.36 billion, up 0.48% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.46 per share and revenue of $67.27 billion. These totals would mark changes of +5.69% and +0.66%, 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 such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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.

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. Over the past month, the Zacks Consensus EPS estimate has moved 0.04% lower. PG is currently a Zacks Rank #3 (Hold).

Looking at its valuation, PG is holding a Forward P/E ratio of 23.35. For comparison, its industry has an average Forward P/E of 21.84, which means PG is trading at a premium to the group.

Investors should also note that PG has a PEG ratio of 3.39 right now. 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 was holding an average PEG ratio of 3.73 at yesterday's closing price.

The Soap and Cleaning Materials industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 11, which puts it in the top 5% 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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