Up or down? Procter & Gamble price prediction for November

Up or down? Procter & Gamble price prediction for November
Written by:
Stanko Iliev
28th October, 22:16
Updated: 28th October, 22:19
  • Even with the COVID-19 pandemic, the business of Procter & Gamble is going well
  • Total revenue has increased by 8.5% Y/Y in Q1and GAAP EPS was $1.63
  • If the price jumps above $140 the next target could be located at $145 or even $150

Procter & Gamble (NYSE: PG) price has advanced from $111 above $145 in less than six months and the current price stands around $137. Procter & Gamble has found strong support above $130 but the price is still not able to surpass $150 resistance.

Fundamental analysis: Procter & Gamble raised its FY2021 outlook for organic sales growth

Even with the COVID-19 pandemic, the business of Procter & Gamble is going well and the company will have a rise in revenue for the next fiscal year. Procter & Gamble has released recently Q1 earnings results, total revenue has increased by 8.5% Y/Y and Q1 GAAP EPS was $1.63.

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It is also important to say that the company raised its FY2021 outlook for organic sales growth from a range of +2% to +4% to a range of +4% to +5%. The company declared a $0.7907/share quarterly dividend which is in line with previous.

Despite this, my opinion is that Procter & Gamble is currently overvalued and the main drivers of Procter & Gamble’s recent capitalization growth are external. With a $353B market capitalization, this stock is a little expensive and represents opportunity only for short-term traders.

There are some obvious risks when it comes to trading this stock currently but Procter & Gamble’s stability and size will always attract potential investors and traders. The attention of investors is also focused on the US stimulus aid package negotiations and the upcoming presidential elections.

The US presidential elections will be on November 3 and according to the polls, US President Trump’s rival, Joe Biden, leads.

Technical analysis: Bulls are focused on breaking the resistance level at $150

Data source: tradingview.com 

When we take a look at the chart above ( one year period), we can see that the price of this stock has advanced from $94 above $145. As long the price is above this trend line and $130 this stock remains in the “buy” zone and there is no indication of the trend reversal.

If the Procter & Gamble price falls on the trend line and if we get a “bullish” confirmation candle it would be a very good entry point for short-term traders who are trading with “stop-loss” and “take profit” orders. The trend line represents a very strong support level, if the price breaks this trend line it would be a strong “sell” signal and we have an open way to $130.

If the price jumps above $140 it would be a signal to buy Procter & Gamble stock and we have the open way to $145. Rising above $150 supports the continuation of the bullish trend and the next price target could be located around $160.

Summary

Fund managers have a buy rating on Procter & Gamble stock and even with the COVID-19 pandemic, the business of Procter & Gamble is going well. Long positions in the stock provide an annual dividend payout of $3.16 which gives us a dividend yield of 2.22% at current levels. Procter & Gamble’s valuation is currently at a nearly 30-year high and as long the price is above $130 this stock is in the “buy” zone.

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