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PG – Market expectations are for record-high Uniform ROA, but management may have concerns about commodities, growth, and pricing

May 19, 2021

  • The Procter & Gamble Company (PG:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) earnings, with a 27.6x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management may have concerns about commodity inflation, top-line growth, and pricing
  • Specifically, management may have concerns about commodity inflation headwinds, their new products and packaging launches, and the sustainability of positive contributions from their pricing strategy. Furthermore, they may lack confidence in their ability to meet their top-line growth targets and maximize product availability in cleaning, health and hygiene categories. Finally, they may be overstating the opportunities of their innovation-based business model