Recently Procter & Gamble (
) sold Pringles, a well known foods brand and the last foods brand
remaining in its portfolio. We wrote on this recently in a note
P&G Walks Away From Foods, Sells Pringles For
. Also it entered into a joint venture with Teva Pharmaceutical
Industries to market over-the-counter drugs outside U.S., see
Market Share Upside as P&G Sharpens Focus on
. With P&G taking active steps to distance itself from
), Colgate-Palmolive (
) and Kimberly-Clark (
), we decided to explore what P&G could look like five years
We value P&G with a $75.25 Trefis price estimate of its
stock, at roughly 15% premium to its current market price.
Found in More Pharmacies
The joint venture with Teva merges P&G's heath care brands
(Vicks, Metamucil and Pepto-Bismol) with Teva's portfolio of over
1,500 pharmaceutical products across the over-the-counter pain
medicines, cold & cough drops and digestive treatments.
This will help P&G gain market share by selling more to the
aging baby boomers demographic and take advantage of the upcoming
wave of patents due to expire worth an estimated $50 billion.
P&G will brand generics manufactured by Teva and sell them
though its distribution system across the globe.
Look More Asian
P&G embarked on its ambitious goal to acquire a billion
additional consumers by 2014/15, which naturally draws its focus to
the two most populous nations in the world - China and India.
Out of the 38 product categories in which Procter & Gamble
competes globally, it is present in only 19 on an average globally,
14 on an average in Asia and only 12 in India. We wrote on this
recently in a note titled India is Key to P&G's Additional
Billion Customer Goal.
Sell More Online
In May 2010, P&G entered the e-commerce market by launching
its e-store in the U.S. see P&G's E-Commerce Play Should Help
Operating Margins. While North America leads with a 77% Internet
penetration, Asia witnessed a 6x growth in the number of Internet
users in the last decade and penetration levels are still under
22%. With rising Internet penetration, we expect P&G to
increasingly sell online to reach the under-served emerging
Have Fewer Non-Core Brands
P&G sold Pringles, a well known brand otherwise despite its
elaborate portfolio of personal and household care products. Other
non-strategic and non-core brands such Iams and Eukanuba pet foods
and Duracell batteries might also be candidates for sale at some
You can see a detailed analysis of our
$75.25 Trefis price estimate of Procter &
Gamble's stock here