P&G $73 Fair Value: Vicks and SK-II Become Billion-Dollar Brands

+0.62%
Upside
162
Market
163
Trefis
PG: Procter & Gamble logo
PG
Procter & Gamble

The world’s largest consumer goods company Procter & Gamble (NYSE:PG) has now added Vicks and SK-II to its list of billion-dollar brands. This takes the total number of brands with annual sales in excess of $1 billion to 26. The company recently announced its Q3 results and plans to cut $10 billion in costs by 2016. P&G competes with other leading players in the personal care segment such as Unilever (NYSE:UL), Kimberly-Clark (NYSE:KMB) and Colgate-Palmolive (NYSE:CL).

See our complete analysis for Procter & Gamble’s stock


With Weak Volume And High Input Costs, P&G Focuses On Massive Cost-Cuts

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With slow market volume growth and higher input commodity and energy costs, the company’s earnings have been depressed over the last few quarters despite pricing efforts. With continued weak demand and high cost environment, the consumer giant is trying to rely less on pricing and more on streamlining its cost structure to recover margins. In February 2012, it announced plans to cut its costs by $10 billion in the next five years and invest the released resources in emerging markets and personal care segments. 

We value Procter & Gamble with a $73 Trefis price estimate of its stock, at over a 10% premium to its current market price.

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