P&G’s interesting take on the economy makes the company more attractive in 2023

By Waseem Akram On Jan 21, 2023

The chief executive of Club Holdings Procter & Gamble (PG) said on Thursday that inflation is likely to ease and pressure from a strong weakening of the US dollar – comments that only reinforce our view that a strong name is the consumer staples giant in 2023. In an interview with CNBC, CEO Jon Moeller said that input costs are “flattening,” with prices rising at a “lower rate than before before. ” However, he cautioned that could take time to reflect on the company’s earnings statement. “To the extent that all these costs are normalized, the weight of the dollar goes down, that will be a good opportunity to invest in this industry,” said Moeller. Like many US multinationals , P&G has been weighed down by a strong US dollar, making products more expensive overseas, and higher inflation that has dampened demand. The CEO’s comments come on the same day that P&G released its fiscal second quarter earnings. The results showed that organic revenue – excluding the impact of foreign exchange, acquisitions and transfers – rose 5% year over year, as higher prices made up for for weaker consumer demand. Meanwhile, Procter & Gamble, whose premium consumer products include Tide, Pampers and Gillette, has been able to increase its value proposition to customers by expanding their portfolio have to offer products at a range of price points. “Our shares are holding because we have adjusted our portfolio to offer trade-down opportunities when consumers want them within our brands,” Moeller said. “We are in a much better position to deal with trade down … but we don’t see much of it,” he said. Moeller also suggested that demand will pick up this year as China’s economy reopens, saying the state of the global economy “doesn’t look terribly dire.” ” Shares of Procter & Gamble were trading down 0.6% midday Thursday, at $144.63 apiece. Bottom line, Moeller offered a warm welcome to the economy and P&G’s potential for growth in 2023. P&G remains our favorite stock amid economic uncertainty, as its consumer products are essential in any economic environment. We also like that the company has offered several price points for customers looking for cheaper options, especially amid softer demand signals. We hope to see profit margins expand in 2023, as input costs come down and the dollar continues to recover. (Jim Cramer’s Charitable Trust is long PG. See here for a full list of stocks.) As a subscriber to the CNBC Investment Club with Jim Cramer, you will receive a trade alert before Jim trades. Jim waits 45 minutes after submitting a trade alert before buying or selling stocks in his charitable trust portfolio. If Jim has discussed a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE HOUSE CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND OUR PRIVACY POLICY, INCLUDING OUR DISCLAIMER. NO RESPONSIBILITY OR OBLIGATION EXISTS, OR IS CREATED, FOR ANY INFORMATION PROVIDED BY JOINING THE INVESTMENT CLUB. NO SPECIFIC RESULTS OR SPECIFICATIONS ARE GUARANTEED.

In this photo the Procter and Gamble logo can be seen displayed on a smartphone with stock market percentages in the background.

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Club Leader holding Procter & Gamble (PG) Thursday that inflation appears to be easing and pressure from a strong weakening of the US dollar – comments that only reinforce our view that the consumer staples giant is a strong name in 2023.