Short Report on Procter & Gamble Company Stock

Procter & Gamble Company logged a -2.0% change during today's afternoon session, and is now trading at a price of $147.48 per share. The S&P 500 index moved -0.8% and the Nasdaq posted a -0.8% change. PG's trading volume is 3,669,046 compared to the stock's average volume of 6,592,590.

Shares of Procter & Gamble Company have a 50-day average price of $147.6126 as of January 2022. The Procter & Gamble Company provides branded consumer packaged goods worldwide. The large-cap Consumer Defensive company has 106,000 full time employees and is based in Cincinnati, OH. Procter & Gamble Company has returned a 2.1% dividend yield over the last 12 months.

The Company Has a Steady Stream of Strong Cash Flows with an Upwards Trend:

2019-06-30 2020-06-30 2021-06-30 2022-06-30
Revenue (MM) $67,684 $70,950 $76,118 $80,187
Revenue Growth n/a 4.83% 7.28% 5.35%
Gross Margins 48.6% 50.3% 51.2% 47.4%
Gross Margins Growth n/a 3.5% 1.79% -7.42%
Operating Margins 20.4% 22.1% 23.6% 22.2%
Operating Margins Growth n/a 8.33% 6.79% -5.93%
Earnings Per Share $1.43 $4.96 $5.5 $5.81
EPS Growth n/a 246.85% 10.89% 5.64%
Free Cash Flow (MM) $11,895 $14,330 $15,584 $13,567
FCF Growth n/a 20.47% 8.75% -12.94%
Capital Expenditures (MM) -$3,347 -$3,073 -$2,787 -$3,156
Net Debt / EBITDA 1.46 0.96 1.04 1.15

Procter & Gamble Company Is Currently Fairly Valued:

Compared to the Consumer Defensive sector's average of 24.21, Procter & Gamble Company has a trailing twelve month P/E ratio of 27.1 and, according to its EPS guidance of 5.96, an expected P/E ratio of 24.7. Procter & Gamble Company's PEG ratio is 2.71 based on its 10.0% average growth rate of historical and projected earnings per share. This suggests that the company's shares are overvalued.

Procter & Gamble Company's P/B ratio is 7.9 compared to its sector average of 4.09. The company is likely overvalued in terms of its equity. In addition, the company's shares are currently trading 208.5% above their fair value as expressed by Benjamin Graham's formula:

√(22.5 * 1-year average EPS * book value per share) = √(22.5 * 5.44 * 18.676) = $47.81

We believe the company's low debt levels and remarkably strong cash flow trends attenuate the high multiples of the company.

Procter & Gamble Company Is the Subject of Mixed Market Indicators:

22 analysts are following Procter & Gamble Company and have set target prices ranging from $105 to $170 per share. On average, they have given the company a rating of buy. At the current price of $147.48, PG is trading 0.81% away from its average analyst target price of $146.29 per share, implying an analyst consensus of little upside potential for the stock.

The company has a very low short interest since 0.5% of the company's shares are tied to short positions. Institutions own 66.2% of Procter & Gamble Company's shares, while the insider ownership rate stands at 0.12%. The biggest shareholder is the Vanguard Group, Inc. with a 9% stake in the company worth approximately $31,975,022,584.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.