How Did P&G Fare In Q1?

Procter & Gamble (NYSE: PG) not too long ago reported its Q1 fiscal 2025 outcomes (P&G’s fiscal ends in June), with revenues lacking and earnings barely forward of our estimates. The corporate reported income of $21.7 billion and adjusted earnings of $1.93 per share, in comparison with our estimates of $22.1 billion and $1.92, respectively. On this be aware, we focus on P&G’s inventory efficiency, key takeaways from its current outcomes, and valuation.

How Did P&G Fare In Q1?

Procter & Gamble’s revenues of $21.7 billion mirrored a 1% y-o-y decline. Whereas the corporate noticed its quantity stay flat, pricing was up 1%. Nevertheless, this was greater than offset by foreign exchange headwinds and the influence from acquisitions and divestitures. segments, Magnificence was down 5% on account of decrease quantity in China. Inside Magnificence, gross sales for Pores and skin Care merchandise plunged 20% on account of decrease quantity and unfavorable combine. Grooming gross sales had been unchanged and Well being Care income was up 2% primarily on account of favorably product combine.  Material & House Care gross sales had been additionally up 1% on quantity positive factors. Child, Female & Household Care gross sales had been down 2%, primarily on account of a excessive single-digit decline in gross sales of child merchandise, as the corporate noticed a decline in market share for its diapers. P&G reported a 30 bps enchancment in working margin to 26.7% in Q1. With margin progress and a slight decline in shares excellent, P&G posted a 5% y-o-y progress in adjusted earnings per share. P&G has maintained its natural gross sales progress outlook of three% to five% in 2025, and earnings per share to be within the vary of $6.91 and $7.05.

What Does This Imply For PG Inventory?

PG inventory didn’t see any significant change publish Q1 announcement. Though the corporate posted an earnings beat, its decrease Magnificence section gross sales warranted a priority and the scenario could not change anytime quickly, particularly for its premium merchandise in China.

We keep our estimate for Procter & Gamble’s Valuation to be $170 per share, near its present market value. Our forecast relies on a 24x P/E a number of for PG and anticipated earnings of $6.94 on a per share and adjusted foundation for the total fiscal 2025. The 24x determine aligns with the inventory’s common P/E a number of over the past 5 years.

PG inventory has risen 18% this 12 months, in comparison with 23% positive factors for the broader markets. Even when we take a look at a barely longer interval, the adjustments in PG inventory, though, have been removed from constant, the returns had been significantly much less risky than the S&P 500.

Equally, the Trefis Excessive High quality (HQ) Portfolio, with a group of 30 shares, is much less risky. However, it has outperformed the S&P 500 annually over the identical interval. Why is that? As a bunch, HQ Portfolio shares offered higher returns with much less danger versus the benchmark index; much less of a roller-coaster journey, as evident in HQ Portfolio efficiency metrics.

Whereas PG inventory appears appropriately priced, it’s useful to see how Procter & Gamble’s Friends fare on metrics that matter. You will discover different priceless comparisons for firms throughout industries at Peer Comparisons.