{"id":48633,"date":"2023-08-15T10:20:29","date_gmt":"2023-08-15T14:20:29","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/will-procter-gamble-stock-continue-to-rise-after-27-gains-in-the-ongoing-inflation-shock\/"},"modified":"2023-08-15T10:20:31","modified_gmt":"2023-08-15T14:20:31","slug":"will-procter-gamble-stock-continue-to-rise-after-27-gains-in-the-ongoing-inflation-shock","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=48633","title":{"rendered":"Will Procter &#038; Gamble Stock Continue To Rise After 27% Gains In The Ongoing Inflation Shock?"},"content":{"rendered":"<div>\n<p><strong data-ga-track=\"ExternalLink:https:\/\/www.trefis.com\/data\/companies\/PG\/\">Procter &amp; Gamble stock<\/strong> (NYSE: PG) currently trades at $157 per share, roughly 17% above its level in March 2021, and it still has room for growth. P&amp;G saw its stock trading at around $144 in late June 2022, just before the Fed started increasing rates, and is now 9% above that level, while the broader S&amp;P 500 has gained about 18% during this period. The slight rise in PG stock over the last twelve months or so has been driven by pricing gains for P&amp;G and a steady decline in the inflation rate in response to the Fed\u2019s aggressive rate hike plan \u2013 although investors still have concerns about a potential recession.<\/p>\n<p>PG stock is already trading close to its pre-inflation shock high of $164 and still has some room for growth. We estimate <strong data-ga-track=\"ExternalLink:https:\/\/www.trefis.com\/data\/companies\/PG\/no-login-required\/4UvMUH5J\/Procter-Gamble-PG-Valuation-Is-PG-Stock-Expensive-Or-Cheap-?fromforbesandarticle=trefis230815\">Procter &amp; Gamble\u2019s valuation<\/strong> to be around $172 per share, implying roughly 10% gains. This is because the company has seen steady sales growth over the recent quarters and has maintained its operating margin of 22% in recent years, despite rising costs. The company posted upbeat Q4 fiscal 2023 results (fiscal ends in June) and a robust view for fiscal 2024, primarily due to pricing growth.<\/p>\n<p>Our detailed analysis of <strong data-ga-track=\"ExternalLink:https:\/\/www.trefis.com\/data\/companies\/PG\/no-login-required\/5aYMYXcg\/Procter-Gamble-During-2008-Recession-vs-2022-Inflation-Shock-PG-Stock-Has-Recovered-To-Its-January-2022-High-And-Looks-Fairly-Priced-?fromforbesandarticle=trefis230815\">Procter &amp; Gamble\u2019s upside post-inflation shock<\/strong> captures trends in the company\u2019s stock during the turbulent market conditions seen over 2022. It compares these trends to the stock\u2019s performance during the 2008 recession.<\/p>\n<p><fbs-ad position=\"inread\" progressive=\"\" ad-id=\"article-0-inread\" aria-hidden=\"true\" role=\"presentation\"><\/fbs-ad><\/p>\n<p><strong>2022 Inflation Shock<\/strong><\/p>\n<p>Timeline of Inflation Shock So Far:<\/p>\n<ul>\n<li>2020 &#8211; early 2021: Increase in money supply to cushion the impact of lockdowns led to high demand for goods; producers unable to match up.<\/li>\n<li>Early 2021: Shipping snarls and worker shortages from the coronavirus pandemic continued to hurt supply.<\/li>\n<li>April 2021: Inflation rates cross 4% and increase rapidly.<\/li>\n<li>Early 2022: Energy and food prices spike due to the Russian invasion of Ukraine. Fed begins its rate hike process.<\/li>\n<li>June 2022: Inflation levels peak at 9% &#8211; the highest level in 40 years. S&amp;P 500 index declines more than 20% from peak levels.<\/li>\n<li>July &#8211; September 2022: Fed hikes interest rates aggressively &#8211; resulting in an initial recovery in the S&amp;P 500 followed by another sharp decline.<\/li>\n<li>Since October 2022: Fed continues rate hike process; improving market sentiments help S&amp;P500 recoup some of its losses.<\/li>\n<\/ul>\n<p>In contrast, here\u2019s how PG stock and the broader market performed during the 2007\/2008 crisis.<\/p>\n<p><strong>Timeline of 2007-08 Crisis<\/strong><\/p>\n<ul>\n<li>10\/1\/2007: Approximate pre-crisis peak in S&amp;P 500 index<\/li>\n<li>9\/1\/2008 \u2013 10\/1\/2008: Accelerated market decline corresponding to Lehman bankruptcy filing (9\/15\/08)<\/li>\n<li>3\/1\/2009: Approximate bottoming out of S&amp;P 500 index<\/li>\n<li>12\/31\/2009: Initial recovery to levels before accelerated decline (around 9\/1\/2008)<\/li>\n<\/ul>\n<p><strong>P&amp;G and S&amp;P 500 Performance During 2007-08 Crisis<\/strong><\/p>\n<p>PG stock declined from $71 in September 2007 to around $48 in March 2009 (as the markets bottomed out), implying that it lost about 32% of its pre-crisis value. It recovered post the 2008 crisis to around $61 in early 2010, rising 25% from its lows. In contrast, the S&amp;P 500 Index saw a decline of 51%, falling from levels of 1,540 in September 2007 to 757 in March 2009. It then rallied 48% between March 2009 and January 2010 to reach levels of 1,124.<\/p>\n<p><strong>P&amp;G\u2019s Fundamentals Over Recent Years<\/strong><\/p>\n<p><strong data-ga-track=\"ExternalLink:https:\/\/www.trefis.com\/data\/companies\/PG\/no-login-required\/lmoAO2DH\/Procter-Gamble-Revenue?fromforbesandarticle=trefis230815\">Procter &amp; Gamble\u2019s revenue<\/strong> rose from $71 billion in 2020 to $82 billion in 2023, driven by better price realization. P&amp;G\u2019s largest segment is Fabric &amp; Home Care, contributing over one-third of the company\u2019s revenues. P&amp;G\u2019s operating margin has been stable at around 22% in recent years. Our <strong data-ga-track=\"ExternalLink:https:\/\/www.trefis.com\/data\/companies\/PG\/no-login-required\/1s7WAK4Y\/Procter-Gamble-PG-Operating-Income-Comparison?fromforbesandarticle=trefis230815\">Procter &amp; Gamble Operating Income Comparison<\/strong> dashboard has more details. The company\u2019s reported earnings increased from $5.13 in 2019 to $6.07 in 2023.<\/p>\n<p><strong>Does P&amp;G Have A Sufficient Cash Cushion To Meet Its Obligations Through The Ongoing Inflation Shock?<\/strong><\/p>\n<p>P&amp;G\u2019s total debt is around $35 billion, aligning with levels seen in 2020. However, its total cash has decreased from $16 billion to $8 billion over this period. The company garnered $17 billion in cash flows from operations in 2023. Given its cash position, P&amp;G is in a comfortable position to meet its near-term obligations.<\/p>\n<p><strong>Conclusion<\/strong><\/p>\n<p>The Fed\u2019s efforts to tame runaway inflation rates are helping market sentiment, and we believe P&amp;G stock has the potential for more gains once fears of a potential recession are allayed. We believe investors can use any dip in P&amp;G for gains in the long run. P&amp;G should continue to benefit from a better pricing environment, likely passing on increased input and operating costs to the customers.<\/p>\n<p>PG stock looks like it has some room for growth in the near to mid-term. But what if you\u2019re looking for a high-performance portfolio with a <strong>low downside instead<\/strong>? The Trefis Reinforced Value portfolio has beaten the market consistently while limiting losses during periods of sharp market declines.<\/p>\n<p>Invest with <strong>Trefis <\/strong><strong data-ga-track=\"ExternalLink:https:\/\/dashboards.trefis.com\/data\/companies\/PORTFOLIOS\/no-login-required\/M7MacZNG?fromforbes\">Market Beating Portfolios<\/strong><\/p>\n<p>See all <strong>Trefis <\/strong><strong data-ga-track=\"ExternalLink:https:\/\/dashboards.trefis.com\/data\/price-estimates?fromforbes\">Price Estimates<\/strong><\/p>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.forbes.com\/sites\/greatspeculations\/2023\/08\/15\/will-procter--gamble-stock-continue-to-rise-after-27-gains-in-the-ongoing-inflation-shock\/\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Procter &amp; Gamble stock (NYSE: PG) currently trades at $157 per share, roughly 17% above its level in March 2021, and it still has room for growth. P&amp;G saw its stock trading at around $144 in late June 2022, just before the Fed started increasing rates, and is now 9% above that level, while the [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":48634,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-48633","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-markets","tag-featured"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Will Procter &amp; Gamble Stock Continue To Rise After 27% Gains In The Ongoing Inflation Shock? | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Procter &amp; Gamble stock (NYSE: PG) currently trades at $157 per share, roughly 17% above its level in March 2021, and it still has room for growth.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/ifintechworld.com\/?p=48633\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Will Procter &amp; Gamble Stock Continue To Rise After 27% Gains In The Ongoing Inflation Shock? 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