Strategic Movements July 2021

P&G Selectively to Raises Prices by 4% in September

Procter and Gamble Co. (PG) announced plans to adjust prices in September 2021 by 4% overall.  In a targeted approach, prices on Beauty will increase by 7% overall, Grooming by 4%, Healthcare by 3%, and Fabric and Home by 7%, while Baby, Feminine, and Family Care will be lowered by 1%.  Notice both the early announcement, which will test the appetite of competitors for a price increase, and the selective targeting in their approach as opposed to an across the board approach. Shares rose from $136.61 to $137.75 on the day of the announcement. 2020 Revenue of $71.0 billion and P/E of 20.6.

General Mills to Raise Prices

General Mills Inc. (GIS), facing a 7% cost increase, plans to offset half that loss in profits by reduced discounts and price increases. Shares rose 1.5% on the day of the announcement. 2020 Revenue of $4.2 billion and P/E of 15.8.

Price a Space Flight

What price for a spaceflight? This once theoretical question has become a real necessity for both space operators and space investors. Branson’s Virgin Galactic (SPCE), Bezo’s Blue Origin, and Musk’s SpaceX plan to profit by charging customers for a flight to outer space.  Virgin Galactic is planning for 400 flights a year by 2022 with multiple spacecraft. While Branson’s recent flight had over 20 bids in excess of $4.8 million, 800 bookings for the future averaged only $250,000 per consumer-astronaut. UBS estimates ticket prices will rise to $300,000 to $400,000 while simultaneously mentioning that future prices may be more accessible when costs decrease. Current market cap of $7.3 billion on 2020 revenue of $238 thousand and losses of $645 million yielding a Price to Revenue ratio of 30,700 to 1. Clearly valued as a growth stock.