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Will Procter & Gamble’s Q2 Results Pressure Its Stock?

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Jan. 16 2019, Updated 8:04 a.m. ET

Analysts’ expectations

On January 23, Procter & Gamble (PG) is expected to announce its results for the second quarter of fiscal 2019 (for the period ending December 31). Analysts expect Procter & Gamble’s financials to remain weak in the second quarter.

Analysts expect Procter & Gamble’s top line to remain soft and mark a YoY (year-over-year) decline. Negative currency rates will likely remain a drag. Increased competition in the value segment could continue to hurt the stock. Persistent challenges in the Middle East and Africa could continue to impact the top-line growth.

Procter & Gamble’s margins are expected to remain weak in the second quarter. Benefits from improved pricing and productivity savings will likely be offset by higher commodities and transportation costs and negative currency rates.

The bottom-line growth is expected to remain low. Sales and margin headwinds are projected to restrict the EPS growth rate. However, the lower effective tax rate and share repurchases will likely support the earnings rate.

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Stock performance in 2019

As of January 11, Procter & Gamble stock has been roughly flat in 2019. In comparison, the S&P 500 Index has risen 3.6%. Colgate-Palmolive (CL), Church & Dwight (CHD), and Kimberly-Clark (KMB) shares have risen 4.3%, 2.1%, and 2.9%, respectively. Clorox (CLX) stock is trading weak. So far, Clorox stock has fallen 0.5% in 2019.

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