Murky Operating Conditions Have Yet to Trip Up Procter & Gamble; Shares Aren't a Bargain

From our vantage point, Procter & Gamble’s fourth-quarter results (7% organic sales growth and a 30-basis-point adjusted operating margin erosion to 18.4%) evidence it is astutely navigating the current uncertain landscape. However, the market doesn’t seem to share our stance, as shares sank 5% on the print. We think this reaction was driven by the cautious tone management struck as it relates to consumer spending (in light of rising interest rates and higher prices at the grocery store and the pump) and inflation (pegged at a $2.4 billion incremental headwind, on top of $3.2 billion in fiscal 2022).