Procter & 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&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&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&G and a steady decline in the inflation rate in response to the Fed’s aggressive rate hike plan – although investors still have concerns about a potential recession.
PG stock is already trading close to its pre-inflation shock high of $164 and still has some room for growth. We estimate Procter & Gamble’s valuation 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.
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