We're trimming a rallying stock to protect against a potential earnings letdown
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- Jim Cramer's Charitable Trust is selling 100 shares of Procter & Gamble at roughly $151.16, reducing its PG weighting to 0.75% from 1.15% while still holding 200 shares
- Procter & Gamble is set to report Wednesday morning for the fourth quarter of fiscal 2026, with management expected to issue guidance for the now-underway fiscal 2027
- PG shares outperformed the broader market on Tuesday as money rotated out of data-center stocks, with consumer staples ranking as the second-best performing S&P 500 sector in the session
- Coca-Cola rallied 4% on an upbeat earnings report, contributing to the broader consumer staples sector strength
- Cramer's Charitable Trust will realize a small gain of about 1% on the PG shares, originally purchased in November 2025 as a defensive hedge against weakness in the AI trade
- P&G management has a long history of underpromising and overdelivering, meaning conservative fiscal 2027 guidance could once again drag the stock despite any solid quarterly results
Why it matters: The trim locks in a small gain on a position taken specifically as a defensive hedge against AI-trade volatility, but the more revealing signal is Cramer's concern about fiscal 2027 guidance — given P&G's track record of underpromising, even a clean quarter could be overshadowed by cautious forward guidance.
