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Procter & Gamble (PG)
NYSE:PG
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Procter & Gamble
(NYSE:PG)80Outperform
Positive Factors
Innovation
P&G's innovation pipeline to create and extend superiority across its business is very strong, and the company continues to leverage recent innovations to drive more trial and household penetration.
Market Performance
P&G delivered a positive quarter, beating on top line and earnings.
Negative Factors
Currency Volatility
Analyst maintains a Hold rating on P&G due to limited upside catalysts and volatility in currency markets.
Procter & Gamble (PG) vs. S&P 500 (SPY)
Market Cap
$406.08B
Dividend Yield2.29%
Average Volume (3M)7.68M
Price to Earnings (P/E)27.6
Beta (1Y)0.25
Revenue Growth0.49%
EPS Growth5.02%
CountryUS
Employees108,000
SectorConsumer Defensive
Sector Strength73
IndustryConsumer Products - Household & Personal
Share Statistics
EPS (TTM)6.28
Shares Outstanding2,344,851,800
10 Day Avg. Volume8,068,911
30 Day Avg. Volume7,678,218
Financial Highlights & Ratios
PEG Ratio5.49
Price to Book (P/B)N/A
Price to Sales (P/S)4.88
Price to Cash Flow (P/CF)21.30
P/FCF Ratio21.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$180.42Price Target Upside4.18% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering20
Procter & Gamble Business Overview & Revenue Model
Company DescriptionProcter & Gamble Co. manufactures and sells branded consumer packaged goods across five segments: Beauty; Grooming; Health Care; Fabric & Home Care; and Baby, Feminine & Family Care. Some of the popular brands owned by the company include Head & Shoulders, Pantene, Olay, Gillette, Oral-B, Vicks, Ariel, Tide, Pampers, Luvs and Bounty. The company was founded by William Procter and James Gamble in 1837 and is headquartered in Cincinnati, OH.
How the Company Makes MoneyProcter & Gamble generates revenue primarily through the sale of its wide array of consumer products, which are divided into several business segments: beauty, grooming, health care, fabric & home care, and baby, feminine & family care. Each segment contributes to P&G's earnings by offering a range of products under well-established brands. The company sells its products through various retail channels, including mass merchandisers, e-commerce platforms, grocery stores, membership club stores, and drug stores. P&G's revenue model is bolstered by its strong brand recognition, global market presence, and continuous investment in innovation and marketing. Strategic partnerships with retailers and a focus on emerging markets also play a crucial role in expanding its revenue base.
Procter & Gamble Financial Statement Overview
Summary
Procter & Gamble displays strong financial health with robust profitability and steady revenue growth. The balance sheet shows effective leverage management, and cash flows indicate strong cash generation and management. Debt levels are moderate but sustainable.Income Statement
Procter & Gamble's income statement showcases strong profitability with a stable gross profit margin of approximately 51.3% in the TTM. The company demonstrates a healthy net profit margin of 12.9% indicating effective cost management. Revenue growth has been moderate, with a 2.8% increase from the previous year, reflecting steady demand for consumer products. EBIT and EBITDA margins are robust at 23.6% and 26.4% respectively, highlighting operational efficiency.88
Very Positive
Balance Sheet
The balance sheet is solid with a manageable debt-to-equity ratio of 0.67, showing prudent use of leverage. Procter & Gamble's return on equity (ROE) is strong at 21.1%, indicating effective use of shareholder funds. The equity ratio stands at 41.9%, demonstrating a stable capital structure. While the company's debt levels are significant, they are offset by a solid equity base.82
Very Positive
Cash Flow
The cash flow statement reflects a strong ability to generate cash with an operating cash flow to net income ratio of 1.86, indicating efficient cash conversion. Free cash flow growth is positive with a 2.6% increase, supporting ongoing investment and dividend payments. The free cash flow to net income ratio of 1.54 signifies strong cash profitability.85
Very Positive
| Breakdown | |||||
| TTM | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 84.35B | 84.04B | 82.01B | 80.19B | 76.12B | 70.95B | Gross Profit |
| 43.30B | 43.19B | 39.25B | 38.03B | 39.01B | 35.70B | EBIT |
| 19.88B | 18.55B | 18.13B | 17.81B | 17.99B | 15.71B | EBITDA |
| 23.29B | 22.58B | 21.82B | 21.24B | 20.85B | 19.31B | Net Income Common Stockholders |
| 15.48B | 14.88B | 14.65B | 14.74B | 14.31B | 13.03B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 9.48B | 9.48B | 8.25B | 7.21B | 10.29B | 16.18B | Total Assets |
| 122.37B | 122.37B | 120.83B | 117.21B | 119.31B | 120.70B | Total Debt |
| 33.37B | 33.37B | 34.61B | 31.49B | 31.99B | 34.72B | Net Debt |
| 23.89B | 23.89B | 26.36B | 24.28B | 21.70B | 18.54B | Total Liabilities |
| 71.81B | 71.81B | 73.76B | 70.35B | 72.65B | 73.82B | Stockholders Equity |
| 50.29B | 50.29B | 46.78B | 46.59B | 46.38B | 46.52B |
| Cash Flow | Free Cash Flow | ||||
| 16.71B | 16.52B | 13.79B | 13.57B | 15.58B | 14.33B | Operating Cash Flow |
| 20.21B | 19.85B | 16.85B | 16.72B | 18.37B | 17.40B | Investing Cash Flow |
| -4.55B | -3.50B | -3.50B | -4.42B | -2.83B | 3.04B | Financing Cash Flow |
| -12.97B | -14.86B | -12.15B | -14.88B | -21.53B | -8.37B |
Procter & Gamble Technical Analysis
Positive
173.18
Price Trends
166.44
Positive
167.94
Positive
167.13
Positive
Market Momentum
1.99
Negative
58.82
Neutral
82.90
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PG, the sentiment is Positive. The current price of 173.18 is above the 20-day moving average (MA) of 169.64, above the 50-day MA of 166.44, and above the 200-day MA of 167.13, indicating a bullish trend. The MACD of 1.99 indicates Negative momentum. The RSI at 58.82 is Neutral, neither overbought nor oversold. The STOCH value of 82.90 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PG.
Procter & Gamble Risk Analysis
Procter & Gamble disclosed 20 risk factors in its most recent earnings report. Procter & Gamble reported the most risks in the “Macro & Political” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Procter & Gamble Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $406.08B | 27.59 | 30.25% | 2.29% | 0.49% | 5.02% | |
74 Outperform | $27.35B | 46.91 | 13.42% | 1.03% | 4.08% | -22.34% | |
74 Outperform | $73.90B | 25.95 | 1362.74% | 2.15% | 3.30% | 26.83% | |
73 Outperform | $148.52B | 23.28 | 28.73% | 3.21% | 1.99% | -10.59% | |
71 Outperform | $47.10B | 18.80 | 302.98% | 3.40% | -1.83% | 45.13% | |
68 Neutral | $46.19B | 24.51 | 19.45% | 3.45% | -0.16% | -26.81% | |
63 Neutral | $20.85B | 13.27 | -10.88% | 7.48% | 1.13% | 11.50% |
* Consumer Defensive Sector Average
Performance Comparison
PG
Procter & Gamble
173.18
17.70
11.38%
CHD
Church & Dwight
110.71
9.90
9.82%
CL
Colgate-Palmolive
91.06
6.18
7.28%
KMB
Kimberly Clark
141.14
21.88
18.35%
UL
Unilever
58.02
10.53
22.17%
RBGLY
Reckitt Benckiser Group
13.44
0.97
7.78%
Procter & Gamble Earnings Call Summary
Earnings Call Date: Jan 22, 2025 | % Change Since: 7.74% | Next Earnings Date: Apr 24, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted steady organic sales growth and several successful product innovations, alongside strong performance in North America and Europe. However, challenges remain with currency and commodity cost headwinds, ongoing difficulties in Greater China, and a softening consumer environment in some areas. Overall, the company maintains a cautiously optimistic outlook for the second half of the fiscal year.Highlights
Steady Organic Sales Growth
Organic sales for the quarter grew 3%, with volume contributing 2 points and mix adding 1 point. Nine out of ten product categories showed organic sales growth.
Strong Performance in Focus Markets
North America and Europe Focus Markets each grew 4% in organic sales, driven by volume growth. Volume and value share increased in eight out of ten categories in North America.
SK-II Growth in Greater China
SK-II in Greater China grew 5%, marking a recovery from a previous 15% decline in the market.
Innovative Product Launches
Launches include Charmin smooth tear, Old Spice and Secret deodorant sprays, Dawn Powerwash, Swiffer PowerMop, Oral-B iO toothbrushes, Crest 3D white toothpaste, and Zevo insect products.
Strong Cash Flow and Shareholder Returns
Adjusted free cash flow productivity was 84%, with $4.9 billion returned to shareholders through dividends and share repurchases.
Lowlights
Decline in Greater China
Despite improvements, Greater China organic sales still declined 3% compared to the prior year.
Currency and Commodity Headwinds
Projected $200 million post-tax headwind from commodity costs and $300 million from currency exchange rates, affecting EPS.
Softening Consumer Environment
Noted volatility in consumer consumption patterns in the U.S. and a generally challenging consumer environment in China.
Challenges in Middle East and Africa
Organic sales in the Asia, Middle East, and Africa region declined in low single digits, indicating ongoing market challenges.
Company Guidance
In the earnings call for Procter & Gamble's Q2 2025, detailed guidance for the fiscal year was provided, highlighting expectations for organic sales growth between 3% to 5% and core EPS growth of 5% to 7%, translating to a range of $6.91 to $7.05 per share. The company anticipates a commodity cost headwind of approximately $200 million after tax, equating to $0.08 per share, and a foreign exchange headwind of about $300 million, or $0.12 per share. Procter & Gamble expects adjusted free cash flow productivity of 90% and plans to return $16 billion to $17 billion to shareholders through dividends and share repurchases. Despite these headwinds, the company remains committed to its long-term growth strategy, focusing on innovation and productivity to offset challenges and drive market growth.Procter & Gamble Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Procter & Gamble Revamps Executive Leadership for Growth
Positive
Jan 22, 2025
Procter & Gamble has announced a significant change in its executive leadership team, marking a strategic move to strengthen its business operations. This shift is expected to enhance P&G’s ability to drive growth and innovation within its industry, potentially impacting stakeholders with improved efficiencies and market adaptation.
Business Operations and Strategy
Procter & Gamble Restructures to Enhance Global Efficiency
Positive
Jan 14, 2025
Procter & Gamble announced a significant restructuring of its global operations to streamline efficiencies and enhance competitiveness. The company aims to consolidate its production facilities, resulting in an anticipated reduction in operational costs by 10% over the next fiscal year. This move is expected to improve the company’s market positioning and provide better value to its stakeholders.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.