Procter & Gamble (PG) Slips on Soft Guidance, Analysts Disappointed

July 29, 2022 9:08 AM EDT
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Price: $128.70 -2.49%

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Shares of P&G (NYSE: PG) are down 3.6% in premarket trading on Friday after the company offered disappointing full-year guidance.

PG reported a core EPS of $1.21 that missed the estimate of $1.23. Net sales came in at $19.52 billion, slightly ahead of the $19.38 billion consensus. P&G reported negative organic volume growth of -1% while analysts were looking for +0.58%.

The company said it expects to generate organic revenue growth of +3% to +5%, missing the consensus of +5.19%. PG expects diluted net EPS growth of +4% compared to FY 2022 EPS of $5.81, which equates to $5.93 per share.

Stifel analyst Mark S. Astrachan said the results were disappointing and “somewhat transitory.”

“Overall we view the result as disappointing, particularly given consistency and outperformance in recent years. That said, we anticipate sales underperformance to be mostly transitory, including results from Russia, China, and SKII. We anticipate F2023 consensus moves down ~1%-2%, with PG shares underperforming similarly,” Astrachan wrote in a research note.

Goldman Sachs analyst Jason English is also disappointed as he believes PG reported results and outlook that “fall short of an already lowered bar.”

“Most investors expected EPS guidance to come in below the Street at the mid-point, but the range provided is still below what most we spoke with expected. All-in, we would expect the stock to trade down on the quarter miss and guide-below,” English said.

By Senad Karaahmetovic

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