P&G Shares Hit 5-Year Low Amid Guidance Disappointment

Procter & Gamble (PG) shares have been trading near $144, just about 5% above their 52-week low of $137.62. The company's dividend yield is around 3%, which would usually pique the interest of investors.

However, the guidance provided by P&G for its fiscal 2027 earnings per share (EPS) growth has tempered enthusiasm. Management expects core EPS to range between $6.89 and $7.11, implying a growth rate of 0% to 3%. This is slightly below analyst expectations.

The company's guidance includes a significant headwind: about $1 billion in after-tax costs from higher raw materials, energy, and transportation expenses. These costs are expected to have a $0.56-per-share drag on EPS growth, which is equivalent to around 8 percentage points of core EPS growth being wiped out.

This means that if P&G were able to strip out these headwinds, it would be growing core EPS at an impressive rate of around 10%. However, investors won't get to benefit from this hypothetical growth, as the company expects to absorb these costs throughout the year.