Procter & Gamble (PG) reported disappointing earnings last week and cut its earnings forecast to $3.88. PG is struggling in terms of their pricing as competition is stealing market share by being lower in price. This in turn has PG on the defensive having to lower prices which obviously has a negative impact on margins. P&G is a great business but at about 16-17 times earnings I think there are a lot more attractive areas of the market. I’m confident that the company will right the ship and their recently announced multi-year cost cutting program is a great start. If the stock were to trade below $60 I believe it would be much more compelling.
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