What's Next For Procter & Gamble Stock?

Core Insights - Procter & Gamble (P&G) reported Q1 fiscal 2025 results with revenues of $21.7 billion, reflecting a 1$1.93, slightly above estimates [1][2] Revenue Performance - P&G's revenue decline was attributed to flat volume and a 1% increase in pricing, which was offset by foreign exchange headwinds and impacts from acquisitions and divestitures [2] - The Beauty segment experienced a 5% decline, primarily due to a 20% drop in Skin Care sales linked to lower volume and unfavorable product mix [2] Segment Analysis - Grooming sales remained unchanged, while Health Care revenue increased by 2% due to a favorable product mix [2] - Fabric & Home Care sales rose by 1% driven by volume gains, whereas Baby, Feminine & Family Care sales decreased by 2%, largely due to a high single-digit decline in baby product sales and a loss in market share for diapers [2] Margin and Earnings - P&G achieved a 30 basis points improvement in operating margin to 26.7% in Q1, contributing to a 5% year-over-year growth in adjusted earnings per share [2] - The company maintained its organic sales growth outlook of 3% to 5% for 2025, with expected earnings per share in the range of $6.91 to$7.05 [2] Stock Performance - Following the Q1 announcement, P&G stock did not experience significant changes despite the earnings beat, with concerns arising from lower Beauty segment sales [3] - The estimated valuation for P&G stock is $170 per share, based on a 24x P/E multiple and expected earnings of$6.94 per share for fiscal 2025 [3] Market Comparison - P&G stock has increased by 18% this year, compared to a 23% gain for the broader markets, indicating less volatility in returns compared to the S&P 500 [3]