Procter & Gamble: Oscillates Around $150 at Pre-Earnings Release

Written by Larince Zhang

Procter & Gamble is an American company which engages in the provision of branded consumer packaged goods, operating through segments namely Beauty, Grooming, Health Care, Fabric and Home Care, Baby, Feminine and Family Care. The company shall release its earnings result for the fiscal quarter ending March 2023 on 21st April (Friday), before market open.

Fig.1: Reported Sales of P&G versus Analyst Forecast. Source: CNN Business

Throughout the decade (2012-2022), the company recorded the lowest sales in 2017, which was $65.1B. However, its sales gradually recovered for the next five years, to $80B in 2022, up over 23%. The company’s success as “the maker of everything you buy for your house” is inseparable from a good business strategy, which includes understanding consumer needs, strong research and development, marketing, diversification and brand positioning.

In addition, P&G recently announced a 3% dividend hike, to $94.07/share. This marks the company’s 67th consecutive year of dividend hikes. Its ability to pay dividends for over a century in the past reflected the company’s solid fundamentals and financial strength, including a strong cash flow generation capability.

In the coming earnings announcement, consensus estimates for sales of P&G stood at $19.2B, down -7.69% from the previous quarter and slightly below the same period last year which was recorded at $19.4B.

Fig.2: Reported EPS of P&G versus Analyst Forecast. Source: CNN Business

EPS wise, the figure hit $5.81 in FY 2022. Market consensus for EPS in the coming quarter stood at $1.32, down nearly -17% from the previous quarter, and remains flat as the same period last year. In general, market participants do not anticipate growth nor losses throughout the year, in which sales and EPS were forecast to remain flat at $80.8B and $5.83, respectively.

Technical Analysis:

#Procter&Gamble ($PG), Daily: The share price underwent three different phases during the first quarter this year. It started with a downtrend in January, leaving the year high at $154.79. It hit a bottom in February, remaining consolidated at the low range $135.81-$141.57. It then rode on a strong bullish wave and recouped over 90% of January’s losses, and is currently above support $148.55 (FR 61.8%). The high of this month $152.91 serves as minor resistance. A break above this level may encourage the bulls to continue testing zone $154.79-$156, followed by psychological level $160. On the other hand, if price breaks below $148.55, it may dive lower to test dynamic support 100-day SMA, followed by $143.50 (FR 50.0%). Price closure below these two critical levels may indicate bearish continuation.

About the author

Larince Zhang

Larince entered the world of live market analysis and trading in 2013. Her passion ranges from foreign exchange to commodities, indices and futures as well as stocks. Having a Bachelor Degree majoring in Banking and Finance, she strives to make full use of her learned knowledge together with practical trading to achieve a more comprehensive market analysis.

Through years of trading experience, she believes “Simple is Best”, as the market is driven by human activity. It is human psychology that one should opt to improve on instead of mere technical or fundamental analysis. She believes in three core elements to a mature trading approach – scrupulous trading mindset, well-planned strategies and strict money management.