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Procter & Gamble (PG) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research
·3-min read

Procter & Gamble (PG) closed at $119.57 in the latest trading session, marking a +1.62% move from the prior day. The stock outpaced the S&P 500's daily gain of 1.54%. Meanwhile, the Dow gained 0.85%, and the Nasdaq, a tech-heavy index, added 1.87%.

Heading into today, shares of the world's largest consumer products maker had gained 0.35% over the past month, outpacing the Consumer Staples sector's gain of 0.12% and lagging the S&P 500's gain of 0.57% in that time.

Wall Street will be looking for positivity from PG as it approaches its next earnings report date. In that report, analysts expect PG to post earnings of $1.13 per share. This would mark year-over-year growth of 2.73%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $16.77 billion, down 1.9% from the year-ago period.

Investors might also notice recent changes to analyst estimates for PG. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.04% higher. PG is currently sporting a Zacks Rank of #2 (Buy).

In terms of valuation, PG is currently trading at a Forward P/E ratio of 23.74. For comparison, its industry has an average Forward P/E of 23.74, which means PG is trading at a no noticeable deviation to the group.

Meanwhile, PG's PEG ratio is currently 3.3. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Soap and Cleaning Materials was holding an average PEG ratio of 3.96 at yesterday's closing price.

The Soap and Cleaning Materials industry is part of the Consumer Staples sector. This group has a Zacks Industry Rank of 35, putting it in the top 14% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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