PG is expected to sustain momentum
Procter & Gamble (PG) is scheduled to announce its earnings results for the third quarter of fiscal 2019 before the market opens on April 23. Analysts’ estimates indicate that Procter & Gamble’s top and bottom line growths are expected to stay low.
We expect Procter & Gamble’s organic sales to continue to improve on the back of higher pricing, a favorable mix, and premium innovations. However, its net sales growth is likely to take a hit from adverse currency rates.
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Improved organic sales and productivity savings are expected to support Procter & Gamble’s margins. However, adverse currency rates and inflation in commodities are likely to take a toll on its profit margins, which could continue to decline.
We expect Procter & Gamble’s earnings to improve on a YoY (year-over-year) basis despite cost headwinds. However, its rate of growth is likely to stay low. Procter & Gamble’s earnings are expected to benefit from a lower effective tax rate and share repurchases.
Stock performance so far in 2019
Shares of the majority of household and personal care product manufacturers have marked healthy growth so far this year. Improved organic sales growth has supported the uptrend.
Procter & Gamble stock is up 15.8% YTD (year-to-date) as of April 16. Meanwhile, Colgate-Palmolive (CL), Church & Dwight (CHD), and Kimberly-Clark (KMB) stocks have registered YTD gains of 16.0%, 11.9%, and 8.2%, respectively.
However, the Clorox Company (CLX) stock has fallen 1.2% YTD. Persisting challenges in its Household segment are dragging it down.