Procter & Gamble Stock Rise on Earnings Beat, Outlook Revised
Procter & Gamble stock rose over 1% in pre-market trading on Wednesday after the world’s largest maker of consumer-packaged goods reported better-than-expected earnings in the fiscal second quarter and lifted its annual sales outlook.
The Cincinnati, Ohio-based consumer goods corporation said its revenue jumped over 6.0% to $20.95 billion from a year ago. That was also above the market expectations of $20.34 billion. The Gillette razor maker reported quarterly adjusted earnings of $1.66 per share for the quarter ended in December, beating the Wall Street consensus estimates of $1.65 per share.
The company, which is also known for laundry detergent and toothpaste, raised its outlook for fiscal 2022 all-in sales growth from a range of two to four percent to a range of three to four percent compared to the prior fiscal year. Additionally, the company raised its guidance for organic sales growth from two to four percent to four to five percent.
According to company guidance, GAAP diluted net earnings per share for fiscal 2022 will grow six to nine percent compared to fiscal 2021 GAAP EPS of $5.50. The Company expects core earnings per share to grow three to six percent for fiscal 2022 versus fiscal 2021 Core EPS of $5.66.
Following this, Procter & Gamble stock rose over 1% in pre-market trading to $158.99 on Wednesday after closing 1.93% lower at $156.73 a day before. The stock slumped over 4% so far this year after surging more than 17% in 2021.
“Net, we expect a solid 3% Q2 topline beat (6% org sales was well above the 3.7% consensus and also the higher ~5% street expectation), but modest 1.1% profit miss vs consensus (EPS was a penny ahead on below the profit line items), and reiterated FY EPS guidance, to have only a muted stock reaction, as we believe the market generally expected topline upside and GM downside,” noted Dara Mohsenian, equity analyst at Morgan Stanley.
“Ultimately, similar to last quarter, we see Procter & Gamble’s (PG) results as likely to be better than household products peers in a very challenging cost environment, with PG increasing its full-year cost/FX guidance headwind by ~400 bps to EPS, but maintaining FY EPS guidance with a 150 bp raise in organic sales guidance.”
Procter & Gamble Stock Price Forecast
Nine analysts who offered stock ratings for Procter & Gamble in the last three months forecast the average price in 12 months of $166.89 with a high forecast of $185.00 and a low forecast of $146.00.
The average price target represents a 6.48% change from the last price of $156.73. From those nine analysts, six 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 investment bank gave an “Overweight” rating on the consumer goods corporation’s 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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