Procter & Gamble is the other company, which is relatively not far away from my previously set investable level (see more). After a weak start of the year company rebounded and share price is flat for last months. Although if we consider company is about to grow 10% annually (of which around 3% is paid for dividend), then flat share price with elapse of time is getting more and more attractive.

Business is going average in my opinion. If we look on Core EPS Growth we can see that calendar Q1 (it’s Q3 FY16 in PG) was weak.


Consensus for the next quarter is around $0.75 vs reported $1 in fiscal Q3 2015, so significant decline is expected. Obviously some positive surprise may happen but it’s impossible to predict.

Current Guidance for 2016 is slightly negative, but I assume that it was discounted by the market in the first half of 2015.


The real question is how 2017 can look like. The case is that company is struggling with strong USD (see currency effect above) and if we look on USD Index it is still around all-time highs. If only USD will not further appreciate I assume earnings dynamics should increase in foreseeable future.

Current valuation is in my opinion high. P/E ratio of around 23, EV/EBITDA 14 and 3.2% dividend yield makes me not interested in buying shares now. Only dividend yield looks decent, but all other metrics are not compelling for me. I will wait to my investable level of $72 – then valuation is acceptable to buy shares.


Disclaimer PG – no position