Procter & Gamble Co. (NYSE: PG), a household staple known for a wide range of consumer products, reported Tuesday that sales were lower than expected for the fourth quarter.
Experts suggest that the stock is still a good long-term investment.
Will McGough, Director Investments at Prime Capital advised investors to take a long-term view on P&G and not be too concerned about the recent earnings missed.
P&G’s adjusted earnings per share for the quarter came in at $1.40. This was 3 cents higher than Street estimates.
Investors are now uncertain about the company’s performance because its sales were below expectations. Here you can find the full details of P&G earnings.
P&G CEO Jon Moeller remains positive
P&G CEO Jon Moeller is optimistic about the company’s performance despite ongoing challenges in China.
Moeller, in an interview with CNBC pointed out that, while the Chinese market is still weak, P&G’s unit volumes have been strong in Europe and the United States. He expects China to improve in the medium-to-long term.
The company’s performance across Europe and North America contributed to a significant increase in its gross profit margin. It increased by 350 basis point in fiscal 2024, marking the highest gross profit margin in 17 years.
P&G announced plans to increase dividends by 10% for fiscal 2025. This reflects the company’s strong financial position and commitment to return value to shareholders.
P&G has a record of dividend increases for 68 consecutive years, and a history of 134 consecutive dividend increases. This is unmatched by the majority S&P 500 companies.
Sarat Sethi advises caution when buying P&G stocks
P&G stock is not a favorite among all analysts, despite its strong fundamentals and past dividend performance.
Sarat Sethi, of Douglas C. Lane & Associates, advised caution and advised against new investments in P&G because of concerns about the company’s growth in revenue and the challenges on the Chinese market.
“If I owned it I wouldn’t be selling it.” Sethi told CNBC that he would not put in any new money.
He suggested that investors should wait for a possible pullback before making new investments in the stock.
Sethi may reconsider his position if P&G’s stock price drops by approximately 6% during premarket trading after the earnings report. The stock could be a good opportunity to buy.
Wall Street analysts currently have a positive outlook for P&G with an average price of $176 per share.
This is a potential increase of around 10% from the current levels. This shows that despite short-term issues, there’s still room for growth.
Procter & Gamble may have shown some weaknesses in its recent earnings report, but the company’s dividend history, improved margins and positive outlook on Wall Street suggest that it remains a compelling investment for the long term.
Investors should consider the potential for volatility in the short term against the company’s solid fundamentals and past performance when making investment choices.
This post Procter & Gamble fails to meet sales estimates: Is this still a good long-term investment opportunity? This post may be updated as new information becomes available
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