Is Procter & Gamble Stock Underperforming the S&P 500?

Cincinnati, Ohio-based Procter & Gamble Company (PG) is the world’s largest consumer packaged goods company. With a market cap of $401.7 billion, Procter & Gamble operates through Beauty, Grooming, Health Care, Fabric & Home Care, and Baby, Feminine & Family Care segments.

Companies worth $10 billion or more are generally described as "large-cap stocks," P&G fits right into that category, with its market cap exceeding this threshold, reflecting its substantial size and influence in the household & personal products industry. The company’s extensive operations span over 180 countries and territories across the globe.

P&G touched its all-time high of $180.43 on Nov. 27 and is currently trading 4.7% below that peak. Meanwhile, P&G stock has declined 4.1% over the past three months, lagging behind the S&P 500 Index’s ($SPX) 2.3% dip during the same time frame.

Over the longer term, P&G’s performance looks even more concerning as the stock has gained nearly 8% over the past 52 weeks, notably underperforming SPX’s 15.4% surge during the same time frame.

To confirm the recent consolidation, P&G's 50-day and 200-day moving averages have remained mostly flat in recent months, with the stock trading near these moving averages since late January.

Procter & Gamble’s stock prices rose 1.9% after the release of its impressive Q2 results on Jan. 22. Driven by notable growth in volumes, its net sales grew 2.1% year-over-year to $21.9 billion, which surpassed the Street’s expectations by 1.3%. Furthermore, its core earnings increased 2.2% year-over-year to $1.88 per share, exceeding analysts’ estimates by 1.1%. Meanwhile, the company reaffirmed its full-year all-in sales growth guidance range of 2% to 4% and its full-year organic sales growth guidance of 3% to 5% which boosted investor confidence.

However, when compared to its peer Kimberly-Clark Corporation (KMB), P&G has significantly underperformed compared to KMB stock’s 15.7% surge over the past year.

Nonetheless, analysts remain optimistic about P&G’s prospects. Among the 26 analysts covering the stock, the consensus rating is a “Moderate Buy.” Its mean price target of $182 indicates a modest 5.8% premium to current price levels.