P&G Looks Attractive Today
As the consumer giant make steady progress, we see the firm's shares as looking modestly undervalued in a pricey sector.
While we intend to review our discounted cash flow assumptions, we don’t foresee a material change to our $90 fair value estimate, beyond the time value of money. And despite its brand rationalization, P&G continues to operate with a portfolio of leading brands, making it a crucial partner for retailers looking to drive store traffic, supporting its wide moat. In a sector where discounts are few and far between, P&G strikes us as an attractive investment, with shares trading 5% below our valuation, as we think the market remains reluctant to buy into our contention that P&G is poised to drive accelerating sales growth (to a mid-single-digit level the next several years).
Morningstar Premium Members gain exclusive access to our full analyst reports, including fair value estimates, bull and bear breakdowns, and risk analyses. Not a Premium Member? Get this and other reports immediately when you try Morningstar Premium free for 14 days.