P&G Fiscal 2Q Results Beat Estimates, Raises Outlook

  • In Business
  • 2021-01-21 09:07:24Z
  • By SmarterAnalyst

Procter & Gamble (P&G) announced its FY 2Q21 results on Jan. 20. The consumer goods giant reported earnings of $1.64 per share that was ahead of consensus estimates of earnings of $1.51 per share. P&G had fiscal second-quarter revenues of $19.7 billion, a growth of 8% year-on-year. The company's fiscal 2Q revenues again beat analysts' revenue estimates of $19.3 billion.

P&G's (PG) shares closed at $131.93 on Jan. 20. P&G had diluted net earnings of $1.47 per share, up by 4% year-on-year. The company raised its outlook for FY21 and expects its diluted EPS (Earnings Per Share) to grow in the range of 8% to 10% from its FY20 EPS of $4.96. (See PG stock analysis on TipRanks)

The company also raised its FY21 sales outlook and expects them to grow in the range of 5% to 6% from an earlier expected growth range between 3% to 4%. It also stated that the raised outlook for FY21 includes headwinds from currency fluctuations, higher freight costs, and higher interest expense.

The company expects to pay around $8 billion in dividends in FY21 and expects to buy back shares up to $10 billion in this fiscal year.

On Jan. 19, Jeffries analyst Kevin Grundy reiterated a Buy rating but had reduced the price target on the stock from $169 to $168. Grundy had expected the company to raise its outlook for FY21 and had stated, "We expect PG to lift its FY21 guide w/strong demand, USD weakness, and productivity, partially offset by commodities. PG (and staples) continue to lag S&P 500 leaving shares at ~22.5x NTM P/E, which is relative low vs. mkt since '08-09 downturn."

Overall, analysts remain cautiously optimistic about the stock and the consensus is a Moderate Buy with 8 analysts suggesting a Buy and 4 analysts recommending a Hold on the stock. The average price target of $157 implies a 19% upside potential to current levels.

As per the TipRanks Smart Score system, Procter & Gamble scores a 9 out of 10, which indicates a high likelihood of outperformance.


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