Procter & Gamble Health Downgraded to 'Sell' by MarketsMOJO Due to Poor Growth and Expensive Valuation

Procter & Gamble Health, a midcap pharmaceutical company, has recently been downgraded to a 'Sell' by MarketsMOJO on July 22, 2024. This decision was based on the company's poor long-term growth, negative results in March 2024, and expensive valuation.
Over the last 5 years, Procter & Gamble Health has only seen a 5.79% annual growth in net sales and a 17.91% growth in operating profit. In March 2024, the company's profits fell by -21.3%, with a low debtors turnover ratio of 9.11 times and a -17.82% decrease in PBT less OI. Additionally, with a ROE of 26.6, the company's valuation is considered very expensive with a 10.6 price to book value.

Despite the stock trading at a discount compared to its historical valuations, it has only generated a return of -0.49% in the past year while its profits have fallen by -11.1%. However, the company does have a high dividend yield of 4.9% at its current price.

Procter & Gamble Health has also consistently underperformed against the benchmark over the last 3 years. Along with its negative returns in the past year, the stock has also underperformed BSE 500 in each of the last 3 annual periods.

On the positive side, the company has shown high management efficiency with a ROE of 25.87% and a low debt to equity ratio of 0 times on average. However, the technical trend for the stock is currently sideways, indicating no clear price momentum. The trend has also deteriorated from mildly bullish on July 19, 2024, and has only generated a 0.07% return since then.

It is worth noting that the majority shareholders of Procter & Gamble Health are the promoters themselves. This could potentially impact the company's decision-making and overall performance. With all these factors in mind, MarketsMOJO has downgraded the stock to a 'Sell' and investors should carefully consider their options before investing in Procter & Gamble Health.