Procter & Gamble | Fundamental AnalysisProcter & Gamble's stock price gains have lagged the broader stock market for much of the pandemic. While sales and profits have skyrocketed since the beginning of 2020, the consumer sector giant has been left behind in a rally that has pushed fast-growing niches to new highs.
But that performance gap is closing as investors` interest in hot tech stocks fades. P&G has a chance to build on the positive momentum when the company announces its fiscal 2022 Q2 results tomorrow. Let's take a look at why the owner of global brands like Tide, Bounty, and Pampers might deliver good news to shareholders tomorrow.
First and foremost, we should look at sales momentum.
Wall Street expects sales for the period ending in late December to be $20.4 billion. While that figure represents only a 3% year-over-year increase, it represents significant growth for the world's leading consumer goods giant. During the same period two years ago, sales were $18.2 billion, and P&G's 3% growth would be in addition to the 8% growth of a year ago.
Few businesses can correspond to that level of absolute growth, but P&G is likely to engrave in direct comparisons with industry peers as well. On Wednesday, CEO David Taylor and his team are expected to talk about the market share gains that have made the company's revenues grow faster than rival Kimberly-Clark. P&G also has to show a better balance between price increases and increased sales, while Kimberly-Clark relies more on price increases to increase organic sales.
The next important point is price increases.
Both companies have been aggressively raising prices over the past few months to offset rising costs. For P&G, cost increases have not been insignificant either. Management expects inflation to reduce revenues by $2.1 billion this fiscal year.
We will find out this week whether that short-term earnings forecast has worsened again, as it did three months ago. It is more likely, however, that P&G has been able to weather the price increases. Its market leadership and dominance in premium categories of in-home care, baby care, and tissue have made its stock resistant to inflation for decades. Its success will be seen in P&G's gross profit margin, which is nearly 20 percentage points higher than Kimberly-Clark's.
Finally, the company's management will give analysts the basis for a new outlook.
Much has changed since management updated its fiscal year outlook in late October. Major changes include renewed pandemic threats, difficulties in the supply chain, and rising costs of inputs such as plastic, paper, and oil. The report will clarify whether these problems have knocked P&G off its broad growth ambitions, which call for a sales increase of about 3% this year, which would be only a modest slowdown from last year's 6% jump.
But even a slight decline in that forecast shouldn't worry investors, especially if P&G continues to gain market share and outperforms its competitors on metrics such as profitability. Shareholder returns will also be supported by share repurchase expenses and dividends, which are up for the 65th consecutive year. The annual payout has risen to $3.24 per share from $1.97 per share in the last decade alone.
That stability is one of the main reasons why dividend investors love P&G stock, and it's unlikely to be threatened by any operational problems the company may describe this week.
PG
PG - STOCKS - 18. OCT. 2021Welcome to our Weekly V2-Trade Setup ( PG ) !
-
4 HOUR
Small pullback towards previous sr level.
DAILY
Expecting more bullish pa now!
WEEKLY
Good long setup..
-
STOCK SETUP
BUY PG
ENTRY LEVEL @ 143.37
SL @ 140.98
TP @ Open
Max Risk: 0.5% - 1%!
(Remember to add a few pips to all levels - different Brokers!)
Leave us a comment or like to keep our content for free and alive.
Have a great week everyone!
ALAN
Sector early indicator? No, Consumer Staples, not that much.The Consumer Staples sector - here represented by Procter & Gamble (PG, in pink), Coca Cola (KO, in yellow) and PepsiCo (PEP, in purple) - are mostly not strong early indicators against the broader market (here represented by the DJIA in gray, and the NASDAQ in black)... KO & PEP fell from peaks in July 1998, then a period of over six months of weak underperforming prices from Dec 2014, a period of around two and a half months of weak underperforming prices from Aug 2017, then weak underperforming prices for KO & PEP during all of Aug 2018, and a period of around two and a half months of weak underperforming prices from mid Oct 2019.
Sector Rotation March 2021Recent market sector rotation coming out of the COVID crash has confirmed Sector Rotation theory. I made this video to give viewers a brief introduction to the theory and provide some actionable investing ideas based on what Sector Rotation suggests will be the next stocks to potentially outperform.
Sector Rotation theory suggests that from market bottoms the two sectors that should lead are Consumer Discretionary and Technology. These two sectors did in fact lead the market out of the COVID crash. The next sectors to lead as the market matures are Industrials and Materials. These too followed the theory through 2020 as the bull market grew. At the market top Energy is supposed to lead and sure enough we have seen quite the run on Energy related stocks. What that means going forward if the theory holds is that Consumer Staples and Healthcare should outperform the market.
Long Term PGThis morning I am putting on positions in NYSE:PG and NYSE:JNJ as long term holds.
They both fulfil my thesis that if Sector Rotation theory holds the next sectors to outperform should be Consumer Staples and Healthcare. Both companies represent these two sectors in ways. I like their chart patterns as they are right now within pullbacks. These are also good dividend paying stocks.
Understanding the different levels of PGToday, we will use the Daily chart to understand Bullish and Bearish directions on this stock
a) Currently, the price is on a Key Support/Resistance zone, and we can expect a bounce or a breakout
b) If we have a breakout of the current level, the next level we can find support is 112 - 110
c) If the price bounces on the support zone, we have 3 levels to pay attention to and a final target on 170
d) In case we have a bearish breakout, we will wait for the price to reach the next support zone before developing new setups.
e) In case we have a bounce on the current level, we will wait for a bullish breakout of the current flag pattern, and we will use the green line as the activation level. Final target on 170 / Stop loss below the Flag Pattern
Thanks for reading!
PG - range bound This is my kind of gamble...Proctor Gamble. Less of a gamble when you allow the trade to come to you.
Knowing where yearly high/low sit, you wait for the perfect setup. Although not 100% perfect yet, we have the price bouncing off yearly acting as support with pinbar setup pinning not only off of support but the Bollinger band as well. A solid confluence. With the TRND Bot buy signal about to fire, I'm heavy on calls here once I see how Tuesdays open turns out. Placing a stop loss right under support makes this less of a gamble trade and more of a proctor trade!
"Proctor is a person who takes charge of, or acts for, another. Purpose to provide accountability" Are you accountable for your trades?!
Good luck and safe trading!
Hit that like button! Follow/Share
Flag Pattern above key Support on PGToday, we will share a bullish view we have on Procter & Gamble Co.
a) After making a new ATH from JUL 2020 to NOV 2020, we saw a corrective movement that found support on the ATH before the Pandemic.
b) Now, we can observe a key Support zone with a Flag pattern above it.
c) Flag Patterns are considered continuation structures, and the confirmation level is when the price goes above B
d) We expect a bullish resolution of this stock. IF the price reaches our confirmation level, and a bullish movement towards the First and second Fibo Extension.
PG Bearish inclined naked calls - 22 Jan expiryJanuary's Secondary Trade
This trade is slightly riskier and is the opposite of the general market movement ( bullish ).
The reasons why I pegged this as bearish is:
Based on the 9 Nov price movement due to the US elections, where post COVID-19 stocks spiked, PG fell.
Consumer Defensive sector seems to be in a position where traders in the short term don't see much aggressive growth vs other sectors which have taken a beating and are poised for bigger climbs as we advance against the virus with the vaccines
PG also seems to be contained in a range that puts my strike in a favorable position as it is near the upper S/R Line.
I'm slightly worried about the Earning release on the 20 Jan and might close this trade before just to be safe. This trade will be hedged with a bullish VXX trade, paid by the Jan premiums
Sold 7 CALLs @ 1.5, Strike 142
BP block: 17k
Max gain est: $1045
What we can see on PGToday, we will share our VIEW on PG.
a) The main structure of the current movement is the ascending channel, which has been broken, and currently, we can see the price on the edge of it
b) The second most relevant structure is the corrective pattern we can see on the edge of the ascending channel
c) If we have a breakout of the corrective structure (on the green line), We will consider that the view is active
d) If the price goes as expected, the first Fibo level is a risk-free zone, meaning that we would move our stop loss to break-even
e) Our Final target is 167, where we expect a 100 days movement
f) Also, it's essential to pay attention to the invalidation level. If the price reaches it, we will consider that our view is no longer valid, and maybe a bearish movement could start.
bearish divergence on PGPG hitting 52 week highs, you can see the bulls are losing steam as the RSI and MACD are making lower highs, the last daily candle got pushed down hard at the resistance line, looking for anther bearish daily candle for confirmation. I think we could easily see 104 in the coming days, the market as a whole is looking prime for a pullback. If we break trend line don't mind me. these bearish divergence calls are difficult to time and the divergence can last must longet than you think! trade carefully! this is not trading or financial advise!!!!!