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Procter & Gamble Q4 Preview: Another EPS Beat Inbound?

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The Zacks Consumer Staples Sector has been highly defensive year-to-date, increasing a marginal 1.6% vs. the S&P 500’s 15% decline. The relatively strong performance is undoubtedly a highlight amidst the high number of double-digit valuation slashes we’ve seen year-to-date.

One company residing within the sector, Procter & Gamble PG, is slated to release quarterly results this Friday, July 29th, before the opening bell. Procter & Gamble is a branded consumer products company that markets its products in more than 180 countries.

We see their products on shelves everywhere.

How does the company shape up heading into its quarterly report? Let’s take a dive to find out.

Share Performance & Valuation

Year-to-date, PG shares have extensively underperformed its Zacks Sector, losing nearly 10% in value.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

However, the picture changes upon expanding the timeframe to encompass the last year of share performance. Procter & Gamble shares have tacked on 7%, outperforming its Zacks Setor by a fair margin.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

PG’s forward earnings multiple is a bit elevated at 23.7X and is just in line with its five-year median value of 23.8X. In addition, shares trade at a 15% premium relative to its Zacks Sector.

The company sports a Style Score of a C for Value.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Quarterly Estimates

Analysts have been overwhelmingly bearish over the last 60 days, with five negative estimate revisions hitting the tape. In addition, the Zacks Consensus EPS Estimate for the quarter to be reported resides at $1.23, reflecting a respectable 8.8% uptick in quarterly earnings year-over-year.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

PG’s top-line is forecasted to register some growth as well; the company is forecasted to rake in $19.4 billion in revenue for the quarter, good enough for a 2.3% uptick in sales from the year-ago quarter. The chart below illustrates the company’s revenue on a quarterly basis.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Quarterly Performance & Market Reactions

Procter & Gamble has been on an absolute blazing earnings streak – the company hasn’t reported bottom-line results below the Zacks Consensus EPS Estimate since 2015. Just in its latest report, PG registered a 4% EPS beat.

Quarterly revenue numbers have also been rock-solid – PG has chained together eight consecutive top-line beats.

Additionally, the market has reacted well to the company’s quarterly reports; shares have moved upwards six times over its last eight earnings releases.

Bottom Line

PG shares have outperformed its Zacks Sector over the last year but have underperformed the sector year-to-date. In addition, valuation levels appear a bit elevated.

Multiple negative estimate revisions have come in over the last 60 days, but the company is still expected to register top and bottom-line growth. Furthermore, the company has a long history of exceeding EPS estimates.

Heading into the quarterly report, Procter & Gamble PG carries a Zacks Rank #3 (Hold) with an Earnings ESP Score of a marginal 0.2%.


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