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Stock Strategist

P&G Still Merits a Spot on Shopping Lists

Efforts to hone its focus are starting to yield top-line gains.

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The market has long been reluctant to buy into  Procter & Gamble’s (PG) ability to sustainably reignite its top-line performance, and as such, the shares have languished. However, we have held that the company was taking prudent steps across its organization to right its ship and support its long-term brand advantage.

Despite this, activist investor Nelson Peltz in February 2017 disclosed a $3 billion stake (about 1% of shares outstanding) and subsequently announced his desire for a board seat, which management was reluctant to offer up. Peltz suggested that P&G’s organizational structure, corporate governance, and recent financial performance lagged peers and that more must be done to accelerate the pace of change at the leading household and personal-care company.

Erin Lash does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.