PG Approaching Oversold Discount Zone Ahead of Q4 Earnings BTFD?

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📝 Procter & Gamble (NYSE: PG) is trading at $153.73 (-10.8% YTD), lagging the S&P 500’s +6.5% YTD gain. Despite recent weakness, a confluence of technical support, dividend resilience, and a looming catalyst could signal a tactical entry. Let’s break it down:

🔍 Fundamentals & Catalysts
Q4 Earnings Webcast (July 29):

P&G will webcast Q4 results at 8:30 AM ET, with focus on organic sales growth (guided at +2% FY25) and margin trajectory 14.

EPS Expectations: Q4 consensus at $1.43 (+2.1% YoY); FY25 core EPS guided at $6.72–6.82 (2–4% growth) 410.

Dividend Fortress:

Quarterly payout raised to $1.0568/share (ex-div: July 18), marking 69 consecutive years of increases and a 2.75% yield 612.

Payout ratio at 67% of earnings – sustainable for a consumer staple 6.

Cost Pressures & Mitigation:

Tariff Headwinds: $1B–$1.5B annual cost hit from U.S.-China tariffs 410.

Offsets: $2.4B dividend payouts + $1.4B buybacks in Q3; 280bps gross productivity savings 10.

🌍 Macro & Risk Factors
Consumer Softness: Q3 net sales fell -2% YoY; volume declines in Baby Care (-2%) and Fabric & Home Care (-1%) segments 10.

Pricing Power: Average +1% pricing in Q3 (led by Grooming/Health Care), though mix/elasticity risks persist 104.

Structural Shifts: Portfolio pruning (minor brand exits) and job cuts to offset tariff impacts 4.

📉 Technical Setup: Oversold with Base-Building Potential
RSI 31.5 (Neutral but nearing oversold) 511.

Price vs. MAs: Below all key MAs (20-day: $159.17, 50-day: $161.59, 200-day: $165.56) – signaling bearish momentum but extreme discounts 5811.

Support Zone: $152–153 aligns with 52-week lows ($151.90) and the 2025 dividend-capture floor 212.

MACD -1.57: Suggests potential reversal if momentum shifts 5.

Technical Indicators Summary:
Indicator Value Signal
RSI (14) 31.45 Neutral
MACD (12,26) -1.57 Buy
Price vs. 200D SMA -7.1% Sell
Bollinger Bands (25) $157–161.94 Sell
🎯 Probabilistic Price Targets
Scenario Target Probability Rationale
Bounce to 20D MA $158–160 60% Mean reversion + dividend ex-date support
Reversion to 50D MA $162–164 45% Technical confluence + tariff resolution hopes
Rally to 200D MA + ATH $174 25% Bull case: Macro stabilization + guidance upgrade
📌 Trade Strategy
Entry: $152–154 (aligns with structural support) 28.

Stop Loss: $149.50 (1–2% below July 16 low of $152.27) 2.

Targets: Scale out at $160 → $164 → $174.

Catalysts: Q4 earnings (July 29) + clarity on tariff mitigation 14.

Position Size: Allocate 3–5% of portfolio; pair with long-volatility hedge.

⚠️ Key Risks
Guidance Miss: Sluggish volumes or tariff escalation could pressure FY26 EPS projections.

Technical Breakdown: Close below $151.90 invalidates support, inviting a slide to $145.

Macro Sensitivity: Consumer staples underperformance if inflation rebounds.

💎 Final Take
PG offers a rare combo: defensive yield (2.75%) + oversold technicals + imminent catalyst. While tariffs and consumer weakness justify caution, the $152–154 zone is a high-probability dip-buying opportunity. Earnings day vol could amplify moves – enter pre-event with tight stops.

#PG #ConsumerStaples #DividendKing #EarningsPlay #Tariffs

Disclaimer: This is not financial advice. Conduct your own due diligence.

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