This Mega Consumer Staple is Prozac for Market Woes

Written by GSCR Staff   
Friday, 23 January 2015 09:03

Earnings season has begun with major disappointments from the mega U.S. banks.

These events have served as one of the catalysts for a down to sideways market over the last week or so. As we mentioned in Tuesday’s Guide, good news from mega caps in other sectors should ‘calm frayed nerves’. We look to next week for the answer.

 

The consumer staple giant, The Proctor & Gamble Company (NYSE – PG - $90.73) reports 3QFY15 results next week, on January 27th. Although the recent track record for EPS results versus Street estimates has disappointed somewhat, P&G met the metric last quarter. Hitting or beating the estimates could start a mini-rally in the stock and the consumer staples segment. In reality, not beating the numbers has not negatively impacted the stock. After all, PG’s stock is up 15% over the last year.

 

PG has some solid metrics along the valuation front with a forward P/E of 20 versus a trailing P/E of 25. Admittedly, at the current price, the stock is out of our typical sweet spot. Still, next Tuesday may be the time to buy for a quick trade if you believe that PG is the Prozac that the market needs.

 

 

Have a great day!

 

 

Disclosure: Goldman Small Cap Research analysts are neither long nor short these shares but may elect to purchase the stock within the next 48 hours.

 

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