Morningstar

P&G Looks Attractive Today

As the consumer giant make steady progress, we see the firm's shares as looking modestly undervalued in a pricey sector.

Securities In This Article
Procter & Gamble Co
(PG)

While we intend to review our discounted cash flow assumptions, we don’t foresee a material change to our $90 fair value estimate, beyond the time value of money. And despite its brand rationalization, P&G continues to operate with a portfolio of leading brands, making it a crucial partner for retailers looking to drive store traffic, supporting its wide moat. In a sector where discounts are few and far between, P&G strikes us as an attractive investment, with shares trading 5% below our valuation, as we think the market remains reluctant to buy into our contention that P&G is poised to drive accelerating sales growth (to a mid-single-digit level the next several years).

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About the Author

Erin Lash, CFA

Sector Director
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Erin Lash, CFA, is a sector director, AM Consumer, for Morningstar*. In addition to leading the sector team, she covers packaged food and household and personal care companies. Beyond managing a team of nine analysts and associates covering an array of consumer firms, Lash also conducts fundamental analysis of 13 multi-billion-dollar market capitalization firms in the packaged food and household and personal care space.

Before joining Morningstar in 2006, Lash spent four years as an investment analyst covering retail, transportation, and technology firms for State Farm Insurance. In this capacity, Lash analyzed financial statements, business strategy, and fundamentals of owned companies and potential investments, presenting her recommendations based on this analysis to State Farm portfolio managers for ownership consideration.

Lash holds a bachelor’s degree in finance from Bradley University’s Foster College of Business. She also holds a master’s degree in business administration, with concentrations in accounting and finance, from the University of Chicago Booth School of Business. Lash has completed the Chartered Financial Analyst® designation. She ranked second in the food and tobacco industry in The Wall Street Journal’s annual “Best on the Street” analysts survey in 2013, the last year the survey was conducted.

* Morningstar Research Services LLC (“Morningstar”) is a wholly owned subsidiary of Morningstar, Inc

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