On Friday, the stock of Procter & Gamble took a significant hit, sliding 4.75%, and it ended up being the worst performer within the Dow Jones Industrial Average (DJIA). Despite this, the Dow only dipped by 0.37%, even as the NASDAQ saw gains. The dip in P&G’s stock came after an analyst from BNP Paribas raised concerns about the stability in the U.S. consumer staples category, adding to the broader market agitation when January’s U.S. Retail Sales figures unexpectedly showed a decline of 0.9%.
Procter & Gamble, a company recognized for its dependability, experienced a downturn as questions arose over its 2025 forecasts. An analyst had a conversation with CEO Jon Moeller and wasn’t reassured by what he heard. Moeller highlighted ongoing challenges, sharing that the volatility in the U.S. consumer staples market is more significant than at any point during his time at the company. Moeller observed a dip in demand across certain sectors within the U.S., despite strong international performance, particularly in Latin America and Europe. Another hurdle has been de-stocking in American markets.
Following these discussions, the analyst expressed doubt regarding Procter & Gamble’s projected organic sales growth by 2025, although Moeller emphasized that the company has strategies in place to protect its earnings per share even if U.S. growth slows. The analyst predicted that Procter & Gamble’s guidance might remain uncertain until more information is clarified in upcoming quarterly reports.
This bad news was compounded by January’s retail sales report, which revealed a larger than expected drop of 0.9%, surprising markets that anticipated a mere 0.1% decline. It’s worth noting that December’s figures were better than initially reported, which only heightened the impact of January’s data.
The retail sales decline was primarily due to a reduction in consumer spending on automotive products, sports equipment, as well as furniture and home goods.
Looking ahead, Friday’s significant dip has pushed Procter & Gamble’s stock below its 200-day Simple Moving Average (SMA), signaling potential challenges ahead. The Moving Average Convergence Divergence (MACD) indicator showed a bearish crossover, suggesting that further downside is likely after what seemed to be the end of a positive trend that had been ongoing since January.
Traders will be watching closely for support within the price range between $153.50 and $160.00, a zone that provided stability for PG shares beginning in April 2024 and throughout most of the previous year. For Procter & Gamble to overcome its current negative trajectory, the stock will need to form a new high above $172.00.
