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Finance & Accounting
Pages 7 (1757 words)
Table of content Table of content 1 Procter and Gamble research report 2 Summary and investment recommendation 2 Business summary 3 Risks 4 Valuation 4 Dividend discount model 5 Free cash flow model 6 Residual income valuation 7 Value based on market multiple 7 Reference 9 Appendix 9 Procter and Gamble research report Summary and investment recommendation Procter and Gamble Company is a manufacturing company involved in production and distribution of consumer products.
The company management has responded to investors worry on costly structure and slow top line growth rate by through a cost saving plan worth $10 billion. This is expected to reduce the headcount that will enable the company achieve its earning per share growth rate forecast to 8% and 10% in free up funds that can be reinvested. Third quarter results shows that the organic sales have increased by 3% from its previous quarter but the operating profit decreased by 11%. The management of the company lowered the earning per share to $3.82-$3.88 from the previous earning of $3.93-$4.08 as a result of the lowering operating profit. This means that Procter and Gambler 2012 fiscal year earning per share is expected to remain flat as compared to previous fiscal EPS of $3.87. The company gross margin has decreased by 150 bases to 49% on higher inputs and negative sales while it has increased by 32.9% on restructuring charges and overhead costs. ...
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