Cincinnati, Ohio-based Procter & Gamble Company (PG) is the world’s largest consumer packaged goods company. With a market cap of $408.8 billion, Procter & Gamble operates through Beauty, Grooming, Health Care, Fabric & Home Care, and Baby, Feminine & Family Care segments. It is expected to release its Q1 earnings before the market opens on Friday, Oct. 18.
Ahead of the event, analysts expect Procter & Gamble to report a profit of $1.90 per share, up 3.8% from $1.83 per share reported in the year-ago quarter. Moreover, the company consistently surpassed Wall Street’s earnings estimates in each of the past four quarters. Its adjusted EPS for the last reported quarter grew by 2.2% year-over-year to $1.40, surpassing the consensus estimates by the same margin.
For fiscal 2025, analysts expect Procter & Gamble to report an adjusted EPS of $6.97, up 5.8% from $6.59 in fiscal 2024. In fiscal 2026, its adjusted EPS is expected to further grow by 6.5% year-over-year to $7.42.
PG is up 18.1% on a YTD basis, slightly lagging behind the S&P 500 Index’s ($SPX) 19.7% gains but outperforming the Consumer Staples Select Sector SPDR Fund’s (XLP) 14.8% returns during the same time frame.
Shares of Procter & Gamble dipped 4.8% after the release of its Q4 and full-year earnings on Jul. 30. Although the company exceeded Wall Street’s adjusted EPS estimates for the quarter, its Q4 sales of $20.5 billion marginally missed the topline estimates. And due to rising expenses, its net earnings to shareholders dipped by 7.3% to $3.1 billion. Its operating margin for the quarter contracted by 140 basis points to 18.9% compared to the year-ago quarter, primarily attributable to a 9% year-over-year increase in selling, general, and admin (SG&A) expenses to $6.3 billion. This translated into a 6.7% decline in operating income to $3.9 billion for Q4.
Moreover, its full-year SG&A expenses rose by 10.4% to $23.3 billion due to increases in restructuring charges, marketing expenses, employee compensations, and overhead expenses, raising concerns about the company’s operational efficiency.
The consensus opinion on the PG stock is moderately bullish, with an overall “Moderate Buy” rating. Out of the 27 analysts covering the stock, 16 recommend “Strong Buy,” two suggest “Moderate Buy,” and nine advise a “Hold” rating.
The mean price target of $178.12 suggests a potential upside of 2.9% from current price levels.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
