Procter & Gamble Returns as Dow's Poorest Performing Stock

Investing

Published: July 21, 2018 8:45 am

Last Updated: January 11, 2020 8:39 pm

Consumer products giant Procter & Gamble Co. (NYSE: PG) sneaked into place as the worst-performing Dow Jones industrials stock this past week, edging out 3M Co. (NYSE: MMM). P&G stock dropped about 0.8% from its price last week, just enough to make the difference. For the year to date, P&G stock is down 14.37%.

The second-worst Dow stock so far this year, 3M, is down 14.2%. That is followed by Caterpillar Inc. (NYSE: CAT), down 13.7%, Walmart Inc. (NYSE: WMT), down 10.8%, and Walgreens Boots Alliance Inc. (NASDAQ: WBA), down 10.5%. Of the 30 Dow stocks, half are showing a loss to date in 2018.

The blue-chip index added just 39 points over the course of the past week to close at 25,058.12, up a scant 0.1% from the previous Friday’s close. The Dow closed up less than 1.0% for the second quarter but down 1.8% for the first six months of 2018.

P&G last week acquired beauty brand First Aid Beauty for a reported $250 million. The odd thing is that just a couple of years ago P&G sold 43 beauty brands to Coty for $12.5 billion. The sale added Hugo Boss and Gucci to Coty’s fragrances business, CoverGirl and Max Factor to its cosmetics lineup and added a new hair color business with Wella and Clairol. At the time the sale was announced, the P&G businesses had annual sales of around $5.5 billion, compared to $4.4 billion for Coty.

The other issue that weighed on the stock last week was a rating change from analysts at UBS. Analyst Steven Strycula lowered the shares from Buy to Neutral and left his price target at $83. In his note to investors, cited by CNBC, Strycula said, “Given current inflation rates and category price battles we recommend investors wait for a cheaper P&G entry point and for Street [estimates] to fall lower.”

P&G stock closed at $78.68 on Friday, down less than 0.1% for the day, in a 52-week range of $70.73 to $94.67. The 12-month consensus price target on the stock is $81.38. The company is scheduled to report second-quarter results on July 31.