Morningstar

P&G's Efforts Rewarded in Results

P&G's Efforts Rewarded in Results
Securities In This Article
Procter & Gamble Co
(PG)

Erin Lash: Over the last several years, much focus has resided within P&G's top-line trajectory, and the second-quarter results highlight that efforts to shed more than 100 brands from its mix and focus its investments behind its key brands are beginning to gain traction. More specifically, organic sales popped 4% in the quarter, similar to the gains reported in the prior quarter and on top of 2% growth in the year-ago period. Even more impressive is the fact that this growth was balanced and driven by both gains in price as well as volume.

Despite this improving performance that we anticipate will persist over the longer term, the firm is fairly valued at current levels after popping at a mid-single digit clip on the results. We would suggest that investors await a more attractive risk-reward opportunity before building a position in this wide-moat name.

More in Stocks

Our Top Pick for Investing in US Renewable Energy

Utility-scale solar and battery storage installations are poised to set records in 2024.
Brett Castelli

How to Measure a Stock’s Uncertainty

Morningstar’s Uncertainty Rating helps investors understand the risks associated with an investment and how that may influence a decision to buy.
Emelia Fredlick

How to Determine Whether a Stock Is Cheap, Expensive, or Fairly Valued

The Morningstar Rating for stocks gauges how a stock’s price compares with what our analysts think it’s worth.
Emelia Fredlick

About the Author

Erin Lash, CFA

Sector Director
More from Author

Erin Lash, CFA, is a sector director, AM Consumer, for Morningstar*. In addition to leading the sector team, she covers packaged food and household and personal care companies. Beyond managing a team of nine analysts and associates covering an array of consumer firms, Lash also conducts fundamental analysis of 13 multi-billion-dollar market capitalization firms in the packaged food and household and personal care space.

Before joining Morningstar in 2006, Lash spent four years as an investment analyst covering retail, transportation, and technology firms for State Farm Insurance. In this capacity, Lash analyzed financial statements, business strategy, and fundamentals of owned companies and potential investments, presenting her recommendations based on this analysis to State Farm portfolio managers for ownership consideration.

Lash holds a bachelor’s degree in finance from Bradley University’s Foster College of Business. She also holds a master’s degree in business administration, with concentrations in accounting and finance, from the University of Chicago Booth School of Business. Lash has completed the Chartered Financial Analyst® designation. She ranked second in the food and tobacco industry in The Wall Street Journal’s annual “Best on the Street” analysts survey in 2013, the last year the survey was conducted.

* Morningstar Research Services LLC (“Morningstar”) is a wholly owned subsidiary of Morningstar, Inc

Sponsor Center