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Procter & Gamble (PG) Gains But Lags Market: What You Should Know

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Procter & Gamble (PG - Free Report) closed at $121.75 in the latest trading session, marking a +0.55% move from the prior day. This change lagged the S&P 500's 0.8% gain on the day. At the same time, the Dow added 0.47%, and the tech-heavy Nasdaq gained 1.12%.

Prior to today's trading, shares of the world's largest consumer products maker had lost 1.73% over the past month. This has lagged the Consumer Staples sector's loss of 1.5% and the S&P 500's loss of 1.07% 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 October 22, 2019. In that report, analysts expect PG to post earnings of $1.24 per share. This would mark year-over-year growth of 10.71%. Our most recent consensus estimate is calling for quarterly revenue of $17.49 billion, up 4.82% from the year-ago period.

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. 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.

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 remained stagnant. PG is currently a Zacks Rank #3 (Hold).

In terms of valuation, PG is currently trading at a Forward P/E ratio of 25. This represents a premium compared to its industry's average Forward P/E of 22.35.

It is also worth noting that PG currently has a PEG ratio of 3.51. 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. Soap and Cleaning Materials stocks are, on average, holding a PEG ratio of 4.03 based on yesterday's closing prices.

The Soap and Cleaning Materials industry is part of the Consumer Staples sector. This group has a Zacks Industry Rank of 109, putting it in the top 43% 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.

To follow PG in the coming trading sessions, be sure to utilize Zacks.com.


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