P&G Faces Pressure as New CEO Takes Charge Ahead of Q2

• Close: $141.79, down 1.06% on the trading day
• 12-month performance: roughly -14.5%
• Q2 results due on January 22
• Analysts project modest top-line growth amid earnings pressure

New leadership, renewed expectations

Effective January 1, Shailesh Jejurikar assumed the role of chief executive officer, stepping up from his prior position as chief operating officer. The transition comes as the shares lag behind the S&P 500, underscoring questions about the pace of improvement under new management.

Jefferies recently upgraded the stock from Hold to Buy and lifted the price target from $156 to $179. The broker views the leadership change as a potential catalyst and anticipates that Jejurikar may drive:

• tighter execution across business units
• accelerated product innovation
• heightened cost discipline

These elements would align with a broader push for operating efficiency and margin improvement.

Valuation and recent price action

The stock’s latest performance remains lackluster:

• 1 month: -1.41%, underperforming the Consumer Staples sector
• 6 months: around -9.2%
• 52-week range: $138.14 to $179.99
• Dividend yield: about 2.95%

Based on current estimates, the shares trade at a forward P/E of 20.5, essentially in line with the sector average of about 20.52. A notably higher PEG ratio of 4.83 versus roughly 2.61 for the sector points to a relatively expensive valuation relative to expected growth.

Q2 and full-year guidance

Ahead of the Q2 print, Street forecasts point to a modest dip in quarterly earnings per share (EPS) alongside a small revenue uptick:

• Q2 EPS: $1.87, down 0.53% year over year
• Q2 revenue: $22.3 billion, up 1.89% year over year
• Full-year EPS guidance: $6.83–$7.10
• Full-year revenue guidance: $86.87 billion, up 3.07%

The Zacks consensus for EPS has inched lower by 0.28% over the past month. The prevailing rating remains a Rank #3 “Hold,” signaling tempered expectations rather than a drastic re-rating.

Should investors sell immediately? Or is it worth buying Procter & Gamble?

China weakness and challenges in Baby care

Two operational hurdles weigh on the profit picture. First, the China market remains weak. In particular, the Beauty segment—accounting for about one-fifth of total sales—continues to be pressured by cautious consumer spending, with no clear sign of a reversal.

Second, the Baby Care category is under strain. Demographic shifts and intensified competition are testing a once-reliable earnings contributor. Some market participants note that improved consumer budgets and steadier currency movements could bolster demand for core household and infant care brands, potentially easing the pressure over time.

Institutional investors and the analyst view

Investor signals are mixed. Ninety One North America Inc. trimmed its PG stake in Q3 by 25%, selling 8,963 shares. The remaining position stands at 26,936 shares valued around $4.14 million.

Institutional holders control roughly 65.8% of outstanding shares, while management and other insiders hold about 0.20%. On the analyst front, the consensus remains constructive: a Moderate Buy with an average target of $171.38, implying upside of a bit over 21% from current levels.

Industry backdrop weighs on the stock

The sector environment provides little wind at the back. Within Zacks’ framework, Consumer Products – Staples sits near the bottom of the coverage universe, ranking 216th out of more than 250 industries. Defensive names like P&G face fewer growth catalysts compared with more cyclical, growth-oriented sectors.

P&G’s beta sits in the range of about 0.38–0.39, underscoring its defensive profile: relatively subdued volatility relative to the market, with limited upside during robust bull runs.

Bottom line

The coming quarterly report will be pivotal in assessing whether the new CEO can translate leadership changes into tangible improvements in execution, innovation, and cost discipline. If Q2 delivers the expected results and management lays out a clear strategy to lift growth and margins, the stock could regain momentum, helped by a favorable view from analysts and a potential re-rating of the growth trajectory.