Procter & Gamble’s (PG) impressive organic sales, productivity savings, and lower effective tax rate supported its stock. Procter & Gamble stock has risen 12.2% on a YTD (year-to-date) basis and trades at a forward PE ratio of 22.1x, which looks expensive given the projected mid-single-digit growth rate. Procter & Gamble stock trades higher than its historical average multiple of 20.4x.
Procter & Gamble’s organic sales are expected to sustain the momentum due to higher pricing and a favorable mix. Productivity savings and the lower outstanding share count are expected to cushion the company’s earnings.
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However, challenges in the grooming and baby care business and higher commodity costs are expected to hurt its financials. We expect higher commodity and logistics costs to have a negative impact on the profit margins of other consumer packaged goods companies including Colgate-Palmolive (CL), Kimberly-Clark (KMB), Clorox (CLX), and Church & Dwight (CHD).
Rating and target price
Among the 25 analysts covering Procter & Gamble, 14 recommended a “hold,” ten recommended a “buy,” and one recommended a “sell.” Analysts have a target price of $103.52 on Procter & Gamble stock, which is on par with its closing price on April 23.
In April, analysts turned more bullish on Green Thumb Industries (GTBIF) (GTII) with a consensus target price upgrade to 28.2 Canadian dollars.
Broadcom (AVGO) stock fell ~8.5% after markets closed yesterday following the semiconductor giant's fiscal 2019 second-quarter earnings release. It missed analysts' revenue estimate and cut its fiscal 2019 revenue guidance by $2 billion to $22.5 billion due to sluggishness in its semiconductor solutions business.
The SPDR Gold Shares ETF (GLD), which tracks physical gold prices, has underperformed the broader markets year-to-date, rising just 4.4% compared to the S&P 500’s (SPY) gain of 15.9% as of June 14. The sentiment for gold, however, has been turning around.
Safe havens such as Treasuries and gold were back in favor on June 14 as stocks fell due to rising tensions in the Middle East, concerns over growth, and the looming threat of the US-China trade war. The tech-heavy Nasdaq Composite Index fell 0.67% in the first hour of trading.
Lululemon (LULU) stock rose 2.1% on June 13 in reaction to better-than-expected first-quarter results and an upgraded outlook for fiscal 2019 overall. The company's first-quarter adjusted EPS grew 34.5% to $0.74 on revenue growth of 20.4% to $782.32 million. Analysts had expected EPS of $0.70 and revenue of $755.31 million. Here's why the outlook got an upgrade.
As of 4:40 AM Eastern Time today, US crude oil active futures were at $51.83, ~4% below their closing level in the previous week. If US crude oil prices stay at those levels today, they'll mark their third week of decline in five weeks.
Amazon is discontinuing its Amazon Restaurants service, which has been delivering food for restaurants in parts of the United States. Amazon Restaurants launched in the United States in 2015 and entered the British market the following year. However, it met strong opposition in the British market.