Procter & Gamble (NYSE: PG) is scheduled to report its fiscal Q1 2025 results on Friday, October 18 (P&G’s fiscal ends in June). We expect the company to post upbeat results, with revenue of $22.1 billion and earnings of $1.92 per share, compared to the consensus estimates of $21.96 billion and $1.90, respectively. While the company’s top-line is expected to see low single-digit growth, its bottom line will likely see a rise in the mid-single-digits, owing to the impact of restructuring charges. Our interactive dashboard analysis of Procter & Gamble’s FY 2025Q1 Earnings Preview has more details on how the company’s revenues and earnings will likely trend for the quarter.
What Trends Will Drive P&G’s Q1 Results?
P&G should see slight growth in sales on the back of modest volume gains. Its grooming business has done relatively better than others lately, a trend likely to continue in Q1 as well. Grooming will likely continue to see pricing gains, while Baby Care sales may trend lower amid continued decline in market share.
The company is undergoing market portfolio restructuring, which is expected to impact the overall margin profile. P&G expects to record a charge of $750 million for accumulated currency translation losses in Q1. Still, its core earnings per share are expected to see a growth higher than its sales, driven by lower shares outstanding. P&G plans to spend $6 billion to $7 billion on share repurchases in fiscal 2025.
How Did P&G Perform In The Previous Quarter?
Procter & Gamble’s revenues were flat y-o-y at $20.5 billion in Q4’24, as 1% pricing gains and 1% volume gains were offset by a 2% unfavorable foreign exchange impact. Looking at segments, Grooming saw 7% organic sales growth, while Health Care was up 4%, Beauty up 3%, and Fabric & Home Care up 2%. Baby, Feminine & Family Care saw a 1% decline in sales on an organic basis. On the margin front, the company reported a 100 bps decline in core operating margin to 19.3% in Q4, primarily reflecting the impact of currency translation charge and higher SG&A expenses. Despite a flat revenue and margin contraction, P&G reported a slight gain in the bottom line at $1.40, versus $1.37 in the prior-year quarter, due to a 0.5% decline in total shares outstanding.
What Does This Mean For PG Stock?
PG stock is up 20% so far this year, broadly aligning with the gains for the S&P 500 index. Notably, the annual returns for PG stock over the recent years were considerably less volatile than the S&P 500. Similarly, the Trefis High Quality Portfolio, with a collection of 30 stocks, is less volatile. But, it has outperformed the S&P 500 each year over the same period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.
We estimate Procter & Gamble’s Valuation to be $170 per share, close to its current market price. Our forecast is based on a 24x P/E multiple for PG and expected earnings of $7.00 on a per share and adjusted basis for the full fiscal 2025. The 24x figure aligns with the stock’s average P/E multiple over the last four years.
While PG stock looks appropriately priced, it is helpful to see how Procter & Gamble’s Peers fare on metrics that matter. You will find other valuable comparisons for companies across industries at Peer Comparisons.
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