Procter & Gamble Co.’s stock slumped Thursday after it was downgraded by Truist analyst Bill Chappell, who suggested investors may have shown the branded consumer packaged-goods company “too much love.”
Chappell cut his rating to hold after being at buy for the past 14 months. He also cut his stock-price target to $155 from $165.
P&G’s PG, -0.61% stock fell 2.2% in midday trading, which put it on track for a third straight decline. It was also the biggest decliner among components of the Dow Jones Industrial Average DJIA, -0.76%. The stock’s $3.38 price decline shaved about 22 points off the Dow, which was down 160 points, or 0.5%.
Chappell said he believes P&G has done a “remarkable job” refocusing its product portfolio, cutting overhead and other costs by about $10 billion and improving investor sentiment.
He said the company, the parent of household brands including Tide, Bounty, Pampers and Swiffer, has shown that its success wasn’t just because consumers spent more time at home during the COVID-19 pandemic, but was the result of more than five years of work. The problem is, he said, that success is now well documented.
The stock has rallied 8.4% over the past three months, compared with a 2.4% gain by the Consumer Staples Select Sector SPDR exchange-traded fund XLP, -0.78% and a 1.7% decline by the Dow. The stock is now trading above the high end of its historical valuation ranges on 5-, 10- and 20-year time frames.
“To be clear, we believe P&G as a company is operating at the highest level in the 20 years that we have covered the stock,” Chappell wrote in a note to clients. “We simply do not see the catalysts on the horizon to recommend new money to the name at current levels.”
He’s also concerned that investors may be “over reading” the company’s strong fiscal third-quarter report, in which the company beat profit and sales expectations, as a 10% increase in prices helped offset a 3% volume decline, and raised its full-year sales outlook. Chappell worries that investors believe P&G’s core customer is mostly unaffected by increasing inflation, but he believes the volume declines are a sign of demand destruction.
“Either consumers are finding ways to use less of a product or trading down to lower-priced products,” Chappell wrote. “We worry that this trend will only continue for the next few quarters as even the higher-end consumers become wary of the persistent higher price points.”
FAQs
For PG, the all-time high before the collapse, $74.67, was achieved on 12th of December 2007. Lowest closing price during the crisis was $44.18 on the 9th of March 2009, leading to a return of -40.83% over the period (potential dividends excluded).
Is Procter and Gamble a good stock? ›
Procter & Gamble's analyst rating consensus is a Moderate Buy. This is based on the ratings of 16 Wall Streets Analysts.
Is P&G stock Undervalued? ›
Valuation metrics show that Procter & Gamble Company (The) may be overvalued. Its Value Score of D indicates it would be a bad pick for value investors. The financial health and growth prospects of PG, demonstrate its potential to underperform the market. It currently has a Growth Score of C.
How low will PG stock go? ›
Procter & Gamble Stock Forecast
The 18 analysts with 12-month price forecasts for Procter & Gamble stock have an average target of 169, with a low estimate of 153 and a high estimate of 179.
Who is the largest shareholder of Procter and Gamble? ›
Among individuals, the largest shareholders are company executives and board members, who receive the stock in compensation. David Taylor is the largest shareholder of PG stock, with over 12 million common shares. On Nov. 1, 2021, Jon Moeller will succeed David Taylor to become President and CEO of Procter & Gamble.
Who owns the most procter and gamble stock? ›
According to the latest TipRanks data, approximately 48.85% of Procter & Gamble (PG) stock is held by retail investors. Vanguard owns the most shares of Procter & Gamble (PG).
Will P&G stock ever split again? ›
Don't expect another split soon
The company isn't in a similarly strong situation today. Organic growth was just 2% in the most recent fiscal year, and, while that represented a boost from the prior year's 1% uptick, it still translates into additional market share losses for the company.
What goes up when stocks goes down? ›
Gold is the go-to choice of many investors coping with market volatility. Gold's value typically increases when the overall market struggles.
What is the largest stock market in the world? ›
There are approximately 55,214 listed companies worldwide as of December 2023. Though the Americas and Europe have large numbers of listed companies, significant growth comes from Asia. The largest stock exchange in the world is the New York Stock Exchange.
What happens when the stock market goes down? ›
When the stock market declines, the market value of your stock investment can decline as well. However, because you still own your shares (if you didn't sell them), that value can move back into positive territory when the market changes direction and heads back up. So, you may lose value, but that can be temporary.
The Procter & Gamble 52-week low stock price is 141.45, which is 10.6% below the current share price. The average Procter & Gamble stock price for the last 52 weeks is 152.40.
How low did stocks go in 2008? ›
The Dow would plummet 3,600 points from its Sept. 19, 2008 intraday high of 11,483 to the Oct. 10, 2008 intraday low of 7,882. 13 The following is a recap of the major U.S. events that unfolded during this historic three-week period.
What did the stock market go down in 2008? ›
From October 6–10, 2008, the Dow Jones Industrial Average (DJIA) closed lower in all five sessions. Volume levels were record-breaking. The DJIA fell over 1,874 points, or 18%, in its worst weekly decline ever on both a points and percentage basis. The S&P 500 fell more than 20%.
How much did the stock market drop during the financial crisis? ›
The Dot-com bubble burst and the financial meltdown of 2007 to 2009. I would argue that this was two separate crashes because the market went on to achieve new heights after the dot-com crash. During the first crash the S&P 500 fell by more than 50%, while the NASDAQ dropped an incredible 75%.
