Procter & Gamble is set to report earnings this week, and the market tone around the consumer staples giant is notably cautious. Even longtime bulls are dialing back expectations, not because the business is fundamentally broken, but because management has already warned investors about multiple headwinds heading into the quarter. Against that backdrop, the stock’s role in portfolios is shifting—from a steady compounder to something closer to an insurance policy.

That reframing was laid out clearly by Jim Cramer, who included Procter & Gamble in his game plan despite openly stating that he does not expect “any fireworks” from the upcoming earnings release. For Cramer, the appeal lies not in upside surprises but in downside protection, a theme increasingly resonant as macro risks build.

Expectations Reset After Pre-Announcements

Procter & Gamble rarely enters earnings season with sentiment this restrained. The company has already pre-announced several negative factors affecting the quarter, effectively lowering the bar and limiting the scope for positive surprises. Pricing pressures, uneven consumer demand, and execution challenges across certain categories have weighed on near-term performance.

Yet paradoxically, this transparency has worked to the stock’s advantage. By signaling that results may be soft well ahead of the report, management has allowed investors to recalibrate expectations. When expectations fall far enough, even results that are merely “less bad” can stabilize or lift the share price—something the market has already hinted at in recent sessions.

Why Defensive Stocks Matter More Late in the Cycle

Cramer’s rationale for owning Procter & Gamble centers on its defensive characteristics. In his view, the company’s products—household essentials ranging from toothpaste to diapers—are purchased regardless of economic conditions. That makes the business inherently less cyclical than many consumer-facing peers.

He framed Procter & Gamble as a hedge within a broader portfolio, particularly at a time when cyclical stocks could face sharper drawdowns if growth weakens. The fact that the stock has already declined meaningfully adds to its appeal. With a dividend yield approaching 3%, income-oriented investors are being paid to wait while volatility plays out elsewhere in the market.

Leadership Transition and Brand Power

Another pillar supporting the investment case is leadership change. A new CEO brings the possibility of strategic recalibration, operational discipline, and renewed focus on execution—elements investors often reward even before tangible results emerge. Combined with Procter & Gamble’s unmatched portfolio of global brands, this creates optionality that the market may not fully price in during periods of pessimism.

Cramer emphasized that brand equity remains intact. Tide, Pampers, Gillette, Crest, Olay, and Febreze are deeply embedded in consumer behavior, giving the company pricing power and resilience that few competitors can replicate. Even when growth slows, these franchises tend to defend margins better than discretionary brands.

What the Market Will Watch Going Forward

As earnings approach, the key issue is not whether Procter & Gamble delivers standout numbers, but whether the results confirm that the worst-case scenario is already reflected in the stock. A rally on weak or mediocre results would reinforce the idea that investors are rotating toward safety rather than chasing growth.

Looking ahead, Procter & Gamble may not lead the market higher in a risk-on environment. But if economic conditions deteriorate, its combination of essential demand, dividend income, and balance-sheet stability could make it one of the more reliable places to hide—exactly the role Cramer envisions for it today.