Consumer Products

What to Watch in Procter & Gamble's Earnings

Procter & Gamble Co. (NYSE: PG) is set to report its fiscal first-quarter financial results before the markets open on Tuesday. Overall, analysts anticipate $1.24 in earnings per share (EPS) and $17.42 billion in revenue. The same period of last year reportedly had $1.12 in EPS and $16.69 billion in revenue.

This firm is the top of the heap in the realm of consumer products. It is larger than its next five consumer products and personal care competitors combined. It has a long, 63-year consecutive year streak of hiking its dividends, and if one company can handle competition it is P&G. It has so many brands and units that it can add to or slice off as it sees fit, creating opportunity and adding potential value.

The consumer products business is very competitive, so the company has been in the midst of right-sizing its portfolio. Its 30% share price gain in the first three-quarters of 2019 might also scare away some investors who feel the premium for buying into the defensive consumer products giant is now just too great.

For the fiscal fourth quarter, net sales were up 4% year over year. Unfavorable foreign exchange was a 4% hurt to sales for the quarter. Excluding the impacts of foreign exchange, acquisitions and divestitures, organic sales increased 7%, driven by a 3% increase in organic shipment volume.

Excluding Monday’s move, Procter & Gamble had outperformed the broad markets, with the stock up about 28% year to date. In the past 52 weeks, the stock was up closer to 43.5%.

A few analysts weighed in ahead of the results:

  • Morgan Stanley rates it Overweight with a $130 price target.
  • UBS has a Hold rating with a $122 target price.
  • Stifel has a Hold rating with a $117 target price.
  • Credit Suisse has a Neutral rating and a $117 price target.
  • SunTrust’s Hold rating comes with a $120 price target.
  • Wells Fargo has a Buy rating with a $135 price target.

Shares of Procter & Gamble traded up 1% at $118.79 on Monday, in a 52-week range of $85.23 to $125.36. The consensus price target is $124.00.