To The Moon

$Procter & Gamble(PG)$ is scheduled to report its quarterly result tomorrow (18 Oct) before market open, but it is expected to report muted quarterly revenue growth. They are facing price competitions in two of their biggest markes, in United States and China on their Tide detergent, Dawn dish soap and Pampers diapers products.

At an investor conference on 05 Sep, PG CFO has indicated that the consumer products company's first quarter, which ended 30 Sep, would "not look materially different" from the prior quarter. In its fourth quarter ended 30 June, sales were flat and organic sales rose 2%. Organic sales do not count the impacts of foreign exchange, acquisitions and divestitures.

P&G's first-quarter net sales are expected to rise 0.35% to $21.95 billion, according to estimates compiled by LSEG. The company is expected to post quarterly adjusted profit per share of $1.90, compared to the $1.83 it reported a year earlier.

Procter & Gamble (PG) Weightage In S&P 500 Consumer Staples Sector

PG have a more than 9% weightage on the S&P 500 consumer staples sector, and PG is considered a bellwether for American consumers broadly, is seeing a slowdown in growth in its biggest market, the United States.

P&G executives have said it offers products for nearly every price point and across retailers, from Walmart to Costco.

So will consumer spending on necessities helped to push the sales, despite the price competition from rivals in U.S. and China? I think what is important would be the outlook guidance from PG in view of rate cut coming.

Will consumer spending more on PG products when consumer have more money to spend, and does not need to concerned with price , rather go for quality.

Cautious Needed As Consumer Staples Lost More Than 2% In Past Months

If we were to look at the S&P 500 sector, consumer staples sector has lost more than 2% while other sector are performing.

So I would think that there might be a slowdown in growth across the industries in this sector.

RRG Indicator Show Consumer Staples Can Improve

With China stimulus package helping their consumer, will we see them going for PG products versus their local manufacturers? $Consumer Staples Select Sector SPDR Fund(XLP)$ is in improving quadrant, and we could see some potential in upside.

But PG might need to show better outlook and also a better net sales from one of its largest market, China.

I am expecting consumer staples sector to remain weak as that is a defensive sector when interest rate is higher.

Technical Indicator - MACD and MTF

PG stock price have potential for an upside if it stay above the short-term and long-term MA today (17 Oct) as the MACD looks promising with upside movement shown.

MTF is giving uptrend for most of the period, but fall short of a strong uptrend. So PG might be trading sideway as market is expected lacklustre earnings.

Summary

I think PG is worth to monitor and see if we can take a position ahead of its earnings tomorrow (18 Oct) before the market open.

PG could provide a surprise in its net sales if the products in two biggest markets picked up in sales despite of price competition.

Appreciate if you could share your thoughts in the comment section whether you think PG could surprise in its earnings despite price competition from rivals.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.