A positive view of P&G’s economy will make the company more attractive in 2023

by SuperiorInvest January 19, 2023

January 19, 2023

The CEO of Club holding Procter & Gamble (PG) said on Thursday that inflation appears to be moderating and pressure from a strong US dollar is easing – comments that only reinforce our view that the consumer goods giant is a solid name in 2023. from the World Economic Forum’s annual meeting in Davos, Switzerland, CEO Jon Moeller told CNBC that input costs are “evening out” and prices are rising “at a slower rate than they were before.” However, he cautioned that it may take some time for this to be reflected in the company’s profit and loss statement. “To the extent that all these costs normalize, the pressure on the dollar subsides, it will be a great opportunity to invest in this business,” Moeller said. Like many U.S. multinationals, P&G has been weighed down by a strong U.S. dollar that has made products more expensive abroad and record high inflation that has dampened demand. The CEO’s comments come on the same day that P&G released fiscal second-quarter earnings. The results showed that organic revenue — excluding the effects of foreign exchange rates, acquisitions and divestitures — rose 5% year over year as higher prices offset weaker consumer demand. At the same time, Procter & Gamble, whose high-end consumer products include Tide, Pampers and Gillette, has been able to increase its value proposition for shoppers by expanding its portfolio to include products at different price points. “Our stock is holding up because we’ve transformed our portfolio to offer discount opportunities when consumers want them within our brands,” Moeller said. “We are much better equipped to deal with the trade down… but we don’t see much,” he added. Moeller also hinted that demand will pick up this year as China’s economy fully reopens, while saying the state of the global economy “doesn’t look frankly dire.” Shares of Procter & Gamble were down 0.6% at $144.63 apiece by midday Thursday. All in all, Moeller offered a welcome positive outlook on the economy and P&G’s growth potential in 2023. P&G remains our preferred stock amid economic uncertainty because its consumer products are essential in any economic environment. We also like that the company has offered several price points for shoppers looking for more affordable options, especially with signs of softer demand. We expect profit margins to increase in 2023 as input costs fall and the dollar continues to weaken. (Jim Cramer’s Charitable Trust is long PG. See the full list of stocks here.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim executes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling shares in his charitable trust’s portfolio. If Jim was talking about stocks on CNBC TV, he waits 72 hours after the trade alert is issued before he executes the trade. THE ABOVE INVESTMENT CLUB INFORMATION IS SUBJECT TO OUR TERMS AND PRIVACY POLICY ALONG WITH OUR DISCLAIMER. NO FIDUCIARY OBLIGATION SHALL EXIST OR CREATE BY YOUR ACCEPTANCE OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTMENT CLUB. NO PARTICULAR RESULT OR PROFIT IS GUARANTEED.

This image shows the Procter and Gamble logo displayed on a smartphone with stock market percentages in the background.

Omar Marques | Lightrocket | Getty Images

Executive director of Club holding Procter & Gamble (PG) said on Thursday that inflation appears to be easing and pressure from a strong U.S. dollar is easing — comments that only reinforce our view that the consumer goods giant is a solid name in 2023.

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A positive view of P&G’s economy will make the company more attractive in 2023

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