Can Procter & Gamble Break Higher Post-Earnings?

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With shares of Procter & Gamble (NYSE:PG) trading around $80, is PG an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Procter & Gamble engages in the manufacture and sale of a range of branded consumer packaged goods. The company operates in five segments: Beauty, Grooming, Healthcare, Fabric Care and Home Care, and Baby Care and Family Care. The products provided by Procter & Gamble are my regarded as essential to a large segment of the worldwide population. As populations continue to grow and adopt its products and as a leading provider, Procter & Gamble stands to see rising profits for many years. Worldwide demand for Procter & Gamble products will continue to drive profits for this huge conglomerate.

The Procter & Gamble Company reported second quarter fiscal year 2014 net sales of $22.3 billion, unchanged versus the prior year period, including a negative three percentage point impact from foreign exchange. Organic sales grew three percent. Diluted net earnings per share were $1.18, a decrease of 15 percent versus a base period that included a $0.21 per share holding gain resulting from P&G’s purchase of the balance of its Baby Care and Feminine Care joint venture in Iberia. Core earnings per share were $1.21, a decrease of one percent versus the prior year. On a currency-neutral basis, core earnings per share increased eight percent for the quarter.

“P&G’s second quarter results came in as we expected,” said Chair, President, and Chief Executive Officer A.G. Lafley. “We’re on-track to deliver our objectives of 3-4% organic sales growth and 5-7 percent core EPS growth for the fiscal year. We expect strong earnings growth in the second half of the fiscal year driven by solid top-line growth, moderating headwinds from foreign exchange, and productivity savings that build throughout the year.”

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