Procter & Gamble Stock Ready to Keep Climbing

PG touched a record high back in December as the broader stock market struggled

Jan 8, 2019 at 10:33 AM
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Procter & Gamble Co (NYSE:PG) has rallied more than 30% since its mid-2018 low of $70.73, and touched a record high of $96.89 in mid-December, even as the broader equities market struggled. Since that high, the shares have pulled back to the $92 area, home of their early 2017 highs and 2017 close. We believe the stock’s current breather presents a prime entry point to jump on the next leg higher for P&G.

PG chart WKALT


Despite outperforming the S&P 500 Index (SPX) by nearly 30 percentage points in the past three months, PG remains surrounded by skepticism. More than half of the analysts following the blue chip maintain tepid “hold” or “strong sell” opinions, and the consensus 12-month price target of $90.88 represents a discount to Friday’s close. A round of well-deserved upgrades and price-target hikes could bolster PG shares.

Options traders have also been more bearish than usual. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity’s 10-day put/call volume ratio of 2.07 is in the 98th percentile of its annual range, pointing to a healthier-than-usual appetite for long puts over calls of late. An exodus of option bears could be a boon for PG.

Subscribers to Schaeffer's Weekend Trader options recommendation service received this PG commentary on Sunday night, along with a detailed options trade recommendation -- including complete entry and exit parameters. Learn more about why Weekend Trader is one of our most popular options trading services.


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