The Procter & Gamble Company (NYSE:PG)’s sound earnings growth per share is expected to be a double-digit 26.09% over the next three years. With the recent EPS being $3.85, expected growth will push the upcoming EPS to $4.855. Today I will look at the latest data in order to investigate whether this expected growth rate is plausible. Check out our latest analysis for Procter & Gamble

Can we expect PG to keep growing?

PG is covered by 18 analysts who by consensus are expecting earnings to increase from today’s level of $3.85 to $4.855 over the next couple of years. This illustrates a relatively optimistic outlook in the near term, with a relatively solid earnings per share growth rate of 26.09% over the next few years. In the same period revenue is expected to grow from $65,193M to $71,681M and profit is predicted to slightly grow from $9,884M to $12,463M in the next couple of years, growing by 26.09%. Though, at the current levels of revenue and profit, margins are certainly underwhelming.

Basis for the growth

The past can be an insightful indicator for future performance for a stock. We can determine whether this level of expected growth is sustainable and whether the company continues to go from strength to strength. However, PG’s earnings growth in the past couple of years has been negative at -6.56%. Although its past performance illustrates a different picture to earnings growth moving forward, it could also mean PG is growing off a lower base, meaning a higher growth rate is easier to achieve. This sign change in growth could indicate a turnaround initiative.

Next Steps:

For PG, I’ve put together three key factors you should look at:

1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.

2. Valuation: What is PG worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether PG is currently mispriced by the market.

3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of PG? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.