Procter & Gamble (PG) shares have inched higher ahead of the company’s fiscal Q3 results set to be reported before the market opens on Oct. 22. Consensus is for the consumer goods giant to record $1.89 in earnings per share (EPS) for its third financial quarter, down from $1.99 per share a year ago.
Procter & Gamble stock has staged a significant comeback in October, currently up more than 10% versus the start of this month.
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www.barchart.comOptions Data Signals a Post-Earnings Dip in P&G Stock
PG options data from Barchart suggests the recent momentum will fade as investors scrutinize the company’s Q3 earnings on Thursday morning.
The put-to-call ratio on contracts expiring Oct. 23 sits at 1.4x currently, indicating a fairly strong bearish skew, with the lower price signaling a post-earnings decline of more than 3% to $154.40 by the end of this week.
That said, Procter & Gamble shares have technical momentum in their favor heading into the Q3 earnings event. As of writing, the stock is trading firmly above its major moving averages (MAs), indicating bulls remain in control across multiple timeframes.
And a rather healthy 2.73% dividend yield strengthens the case for owning P&G.
What Might Hurt Procter & Gamble’s Q3 Earnings
Wall Street expects Procter & Gamble to record a YoY decline mostly because of higher operating costs. The multinational has guided for roughly $1 billion in after-tax pressure from raw materials, energy, and transportation expenses.
Plus, higher net interest expense and lower non-operating income are expected to create additional headwinds of $150 million each, alongside a $50 million currency drag.
Crucially, organic sales were flat in the preceding quarter, indicating limited underlying growth to absorb those pressures.
Together, these challenges could leave profitability squeezed even as productivity savings provide some relief. Investors should scrutinize whether pricing and cost controls can protect margins.
How Wall Street Recommends Playing PG Shares
Despite the aforementioned challenges, Wall Street remains largely bullish on P&G stock for the long term.
The consensus rating on Procter & Gamble sits at “Moderate Buy” currently, with price targets as high as $180, suggesting potential upside of another 13% from here.
www.barchart.com On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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