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P&G's Efforts Rewarded in Results

P&G's Efforts Rewarded in Results

Erin Lash: Over the last several years, much focus has resided within P&G's top-line trajectory, and the second-quarter results highlight that efforts to shed more than 100 brands from its mix and focus its investments behind its key brands are beginning to gain traction. More specifically, organic sales popped 4% in the quarter, similar to the gains reported in the prior quarter and on top of 2% growth in the year-ago period. Even more impressive is the fact that this growth was balanced and driven by both gains in price as well as volume.

Despite this improving performance that we anticipate will persist over the longer term, the firm is fairly valued at current levels after popping at a mid-single digit clip on the results. We would suggest that investors await a more attractive risk-reward opportunity before building a position in this wide-moat name.

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Erin Lash

Consumer Sector Director
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Erin Lash, CFA, is director of consumer sector equity research for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc. In addition to leading the sector team, Lash covers packaged food and household and personal care companies.

Before joining Morningstar in 2006, she spent four years as an investment analyst covering retail, transportation, and technology firms for State Farm Insurance.

Lash holds a bachelor’s degree in finance from Bradley University and a master’s degree in business administration, with concentrations in accounting and finance, from the University of Chicago Booth School of Business. She also holds the Chartered Financial Analyst® designation. She ranked second in the food and tobacco industry in The Wall Street Journal’s annual “Best on the Street” analysts survey in 2013, the last year the survey was conducted.

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