Shares of Procter & Gamble (NYSE:PG) ticked higher at the time of writing following a robust fourth fiscal quarter performance that led to strong sales and margin expansion. The company’s operating margin for the quarter saw a year-over-year increase of 190 basis points or 310 basis points on a currency-neutral basis. A robust rise in gross margin by 380 basis points, or 450 basis points currency-neutral, outpaced consensus predictions by 80 basis points. The margin swell was largely attributed to pricing benefits and productivity savings, though contract material price increases and slight commodity reductions made a dent.
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Leading the earnings parade, PG’s Beauty segment stole the show with an 11% surge in organic sales, backed by an 8% boost in prices. Meanwhile, the hair care subcategory also flourished with high single-digit growth thanks to price increases and an advantageous product mix, despite volume downturns in Asia Pacific and Greater China. It’s worth noting that no P&G segment saw less than a 5% increase in organic sales during the quarter. Furthermore, PG’s FQ4 organic sales as a whole grew by 8%, outperforming the anticipated 6%. Looking to the future, Procter & Gamble forecasts a promising 3-4% all-in sales growth for fiscal 2024, alongside an organic revenue growth of 4-5%, slightly surpassing the 4.4% consensus.
Is PG a Good Stock to Buy Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on PG stock based on six Buys, four Holds, and zero Sells assigned in the past three months, as indicated by the graphic above. Furthermore, the average price target of $166.44 per share implies 5.86% upside potential.
