Why Procter & Gamble Stock Is Up by 4% Today

Procter & Gamble Stock Rallies After Strong Quarterly Report

Shares of Procter & Gamble gained strong upside momentum after the company released its quarterly report.

The company reported revenue of $21 billion and adjusted earnings of $1.66 per share, beating analyst estimates on both earnings and revenue.

Procter & Gamble announced that it had raised the outlook for fiscal 2022. All-in sales growth expectations were adjusted from 2% – 4% to 3% – 4%. Organic sales growth expectations were improved from 2% – 4% to 4% – 5%.

In fiscal 2022, Procter & Gamble expects to pay more than $8 billion in dividends. The company also expects to buy back $9 billion – $10 billion worth of its common stock.

The market has been recently worried about the negative impact of supply chain disruptions and wage growth, but the report indicated that Procter & Gamble remained in a great financial shape. It also looks that traders were ready to increase purchases of lower-PE stocks amid rising Treasury yields.

What’s Next For Procter & Gamble Stock?

Investors look for high-quality names during the times of uncertainty, and Procter & Gamble stock may enjoy an additional boost in case traders remain focused on defensive assets.

Analysts expect that Procter & Gamble will report earnings of $5.91 per share in the current fiscal year and $6.35 per share in the next fiscal year, so the stock is trading at more than 25 forward P/E.

This is not cheap for this type of a company, but what is really cheap in today’s market? S&P 500 has pulled back by about 5% from the recent highs that were reached back at the beginning of this year, but it is up by more than 40% from pre-pandemic levels.

The pressure on high-growth stocks has been visible in recent trading sessions, and Procter & Gamble stock may enjoy additional upside momentum in case capital rotation continues and traders move funds out of high-PE names into safer dividend plays.

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