Moody's Boosts Procter & Gamble Outlook Amid Strong Cash Flow

Moodys Ratings has reaffirmed Procter & Gambles (Aa3) senior unsecured ratings, Aa3 long-term issuer rating, and Prime-1 commercial paper program ratings. The firm also reaffirmed the Aa3 senior unsecured ratings on guaranteed debt issued by The Gillette Company and industrial revenue bonds backed by Procter & Gamble.

The outlook change to positive reflects Procter & Gambles sustained ability to generate significant positive free cash flow and earnings growth through pricing, innovation, and cost savings programs. The company has reshaped its portfolio to focus on more stable and attractive globally-scalable products that have generated stable earnings and modest growth even in periods of geopolitical volatility and consumer weakness.

Procter & Gambles recently announced acquisition of supplements maker Thorne for $3.8 billion demonstrates the companys ability to increase its presence in high-growth markets while maintaining low leverage and strong cash flow metrics through tuck-ins.