Procter & Gamble: A Stock Worth Investing In?

Procter & Gamble (PG) has an average brokerage recommendation (ABR) of 1.82, indicating a Strong Buy rating. However, brokerage recommendations have a vested interest and may not accurately predict stock price movements. A better indicator of a stock's price performance in the near future is the Zacks Rank, which categorizes stocks into five groups from Strong Buy to Strong Sell. Using the ABR to validate the Zacks Rank can be an efficient way to make a profitable investment decision.

Procter & Gamble (PG), the world's largest consumer products maker, has recently seen fluctuations in its stock performance. On July 2, 2025, PG closed at $153.76, down by 2.09% from the previous session, lagging the S&P 500's gain of 0.14% [1].

Investors are closely monitoring PG's upcoming earnings disclosure, scheduled for July 29, 2025. The company is forecasted to report earnings per share (EPS) of $1.43, a 2.14% increase from the prior year, along with projected revenue of $20.85 billion, up 1.54% [1].

While brokerage recommendations indicate a Strong Buy rating with an average brokerage recommendation (ABR) of 1.82, the Zacks Rank provides a more nuanced view. The Zacks Rank categorizes stocks into five groups, from Strong Buy to Strong Sell. PG currently holds a Zacks Rank of #3 (Hold), indicating a more cautious outlook [1].

The Zacks Rank system, validated by third-party audits, has a track record of outperforming the S&P 500, with stocks rated #1 producing an average annual return of +25% since 1988 [1]. Over the last 30 days, the Zacks Consensus EPS estimate for PG has moved 0.1% higher, suggesting analyst optimism [1].

In terms of valuation, PG is trading with a Forward P/E ratio of 22.36, a premium compared to its industry average Forward P/E of 19.2. The company's PEG ratio of 4.47 indicates a higher valuation relative to its anticipated earnings growth rate compared to the industry average of 3.34 [1].

Recent analyst revisions have also influenced PG's stock performance. Two analysts revised their earnings estimates higher in the last 60 days for Allegheny Technologies (ATI), which was upgraded to a Zacks Rank #1 (Strong Buy) [2]. This positive trend in earnings estimate revisions could signal a potential upward movement in stock prices.

However, Evercore ISI downgraded PG from Outperform to Market Perform and reduced the price target from $190 to $170 ahead of the company's Q4 earnings call on July 29. The conservative outlook is based on expectations of organic sales growth between 1% and 3%, below market consensus of 2.4% [3].

Investors should closely monitor PG's upcoming earnings report and guidance for the new fiscal year. The company's performance and outlook will be crucial in determining whether the downgrade by Evercore ISI is justified. If PG's guidance falls short of expectations, it could further impact investor sentiment and the company's stock price.

In conclusion, while the ABR indicates a Strong Buy rating, the Zacks Rank provides a more nuanced view of PG's stock performance. Investors should consider both metrics to make informed investment decisions. The upcoming earnings report will provide further clarity on PG's financial health and future prospects.

References:
[1] https://www.nasdaq.com/articles/procter-gamble-pg-stock-sinks-market-gains-what-you-should-know
[2] https://finance.yahoo.com/news/strong-buy-basic-materials-stocks-134001187.html
[3] https://www.ainvest.com/news/evercore-isi-downgrades-procter-gamble-market-perform-cuts-price-target-170-2507/