Procter & Gamble on Track to Beat Earnings Estimates Again

Procter & Gamble, the world’s largest maker of consumer-packaged goods, is expected to report its fiscal second-quarter earnings of $1.66 per share, which represents year-on-year growth of just over 1% from $1.64 per share seen in the same period a year ago.

The Cincinnati, Ohio-based consumer goods corporation would post revenue growth of over 3% to $20.4 billion from a year ago. It is worth noting that the company has consistently beaten consensus earnings estimates in the last two years, at least.

The company forecasts both all-in and organic sales growth are expected to be 2 to 4%. For fiscal 2022, currency movements are expected to have no effect on sales growth. On a reported basis, EPS is expected to increase 6-9%, whereas the company reported $5.50 in fiscal 2021. EPS for fiscal 2022 is expected to increase 3-6% from $5.66 earned in fiscal 2021, according to ZACKS Research.

Procter & Gamble stock was trading 0.42% lower at $158.35 on Thursday. The stock fell over 3% so far this year after gaining more than 17% in 2021.

Analyst Comments

“We believe strategy changes can sustain Procter & Gamble (PG) LT topline growth in the 4% range. In the US, a strong breadth of performance and share gains give us confidence that market share momentum is sustainable and supports LT topline growth above HPC peers. While near-term pressures from commodity/freight inflation will impact margins, we believe PG has stronger pricing power than peers, particularly with share gains,” noted Dara Mohsenian, equity analyst at Morgan Stanley.

“PG trades at ~22.5x CY22e EPS, an HSD% discount to HPC peers CLX, CL and CHD, and looks compelling given our call for higher LT PG growth,”

Procter & Gamble Stock Price Forecast

Seven analysts who offered stock ratings for Procter & Gamble in the last three months forecast the average price in 12 months of $163.43 with a high forecast of $185.00 and a low forecast of $146.00.

The average price target represents a 3.27% change from the last price of $158.25. From those seven analysts, four rated “Buy”, three rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $161 with a high of $187 under a bull scenario and $107 under the worst-case scenario. The firm gave an “Overweight” rating on the consumer goods corporation’ stock.

Several other analysts have also updated their stock outlook. JP Morgan raised the target price to $165 from $164. Evercore ISI lifted the target price to $175 from $163. Jefferies upped the target price to $185 from $163.

Technical analysis also suggests it is good to buy as 100-day Moving Average and 100-200-day MACD Oscillator signals a strong buying opportunity.

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