Procter & Gamble: Good Progress in Q3 FY24, Despite <1% Sales Growth

Company Update (PG US) (Buy): Underlying fundamentals continue to be solid; returns are attractive for this resilient defensive stock.

Highlights

• P&G is back at its long-term growth algorithm, with broad-based growth.

• Sales growth was just 0.6%, due to currency and retailer stock reduction.

• FY24 outlook has been raised, with 10-11% Core EPS growth expected.

• Shares have a reasonable ~24x P/E and a 2.5% Dividend Yield.

• With shares at $158.14, we expect a 26% total return (11.6% IRR) by Jun-26.

Introduction

We review Q3 FY24 (January-March) results released by Procter & Gamble (“P&G”) on Friday (April 19).

P&G Share Price (Last 1 Year)

Source: Google Finance (21-Apr-24).

We initiated our coverage of P&G with a Buy rating in January, and so far shares have gained 6.1% (including a dividend). We have also added P&G to our “Select 15” model portfolio as of last month.