PG
PROCTER & GAMBLE CoNYSEValuation snapshot
Near base casePrice is close to the base-case intrinsic value.
Price captured with valuation · Valuation Sep 5, 2026
What drives PG's base case?
base-case thesisFiscal 2026 sales benefited from currency, while underlying growth slowed and profitability retreated from the prior year's high. Still, growth improved in the second half, global share stabilized, and most categories held or increased underlying sales. This case assumes innovation, pricing, developing markets, and productivity gradually restore balanced growth without returning immediately to the strongest recent results.
What shapes the assumptions
Fiscal 2027 company guidance of one to three percent sales growth
Annual reported and organic sales growth
Informs revenue growth
Second-half growth improved while global share exited fiscal 2026 roughly flat
Half-year organic sales growth and global market share
Raises revenue growth
Productivity savings partly offset fiscal 2026 mix, marketing, tariff, and commodity costs
Annual cost savings and profitability
Informs operating margin
Adjusted cash conversion recovered from eighty-seven percent to one hundred percent
Annual adjusted free-cash-flow productivity
Lowers reinvestment
Each driver links a business metric to the forecast assumption it shapes — the basis for this case, not investment advice.
Why the gap?
The market is pricing this as if revenue grows 2.5% a year. Over the last 5 years it grew 2.7% a year, so the price assumes about what it has delivered.
What else could explain it?›
- Or, holding growth steady
- the price is also consistent with a 22.8% operating margin, against the 23.0% assumed here.
- How confident is this estimate?
- Robustness 58.0/10 (Moderate) — some of any gap is our own uncertainty rather than disagreement.
- What would change the answer?
- Which assumption this valuation swings on, and by how much.
Many combinations of assumptions reproduce the same price. These are ways to read what the market might be expecting, not the market's actual view. How this is worked out
Research & assumptions
Inspect the valuation thesis, cases, risks, evidence, and model inputs.
View details
Research & assumptions
Inspect the valuation thesis, cases, risks, evidence, and model inputs.
Three independently researched cases generated automatically from published financials. Every assumption is justified and cited; the discount rate is computed from researched market inputs.
Company value drivers
Ranked operating metrics and the valuation assumptions they influence.
1. Annual organic sales growth
This measures underlying annual sales growth excluding acquisitions, divestitures, and currency, making it the clearest indicator of sustainable demand and pricing.
1.0%
reported2. Annual reported operating profit as a share of sales
This tracks how much reported operating profit P&G retains from each unit of sales after product, marketing, overhead, restructuring, and impairment costs.
22.7%
derived3. Annual adjusted free-cash-flow productivity
This measures adjusted free cash flow relative to adjusted earnings and indicates how much accounting profit is available after capital spending.
100.0%
reported4. Annual e-commerce share of company sales
This measures the portion of annual sales generated online, a scalable channel that broadens consumer access and provides evidence of distribution adaptation.
20.0%
reportedBase inputs from financials
source period →Base revenue (TTM)
$87B
Diluted shares
2,416,500,000
Net cash
-$19.4B
Bear
low confidence$106.07
IV / share
-27.6% vs $146.44
- Explicit cash flows
- $21.67
- Terminal value
- $92.40
- Net cash
- -$8.01
- Intrinsic value / share
- $106.07
87.1% of the value rests on the terminal value — high dependency. A small change to terminal growth moves the valuation a lot — see terminal growth below.
Revenue growth1.0% → 1.2% → 1.4% → 1.6% → 1.8%medium
How derived: Fiscal 2026 organic sales grew 0.01 and fourth-quarter organic sales were flat, so this path starts at the bottom of management's 0.01-to-0.03 fiscal 2027 range and recovers only gradually as pricing and volume remain constrained.
Why this confidence: Near-term management guidance ↑, Five-year demand and currency uncertainty ↓
Measured by
- Annual organic sales growth1.0%reported
- Annual e-commerce share of company sales20.0%reported
Evidence for
- Fiscal 2026 organic sales grew 0.01, volume was unchanged, and management guided fiscal 2027 organic sales growth to 0.01-0.03.[P&G FY2026 results]· primary
Evidence against
- Beauty delivered 0.05 organic growth in fiscal 2026, while Greater China and enterprise markets grew 0.04, showing that several businesses could support a faster recovery.[P&G 2026 annual report]· primary
Operating margin21.5%medium
How derived: The reported fiscal 2026 margin fell to 0.227 from 0.243 as product mix, investment, restructuring, tariffs, commodities, and marketing costs outweighed savings, so the bear case assumes some of those pressures persist.
Why this confidence: Audited margin bridge ↑, Uncertain duration of commodity and tariff pressure ↓
Measured by
- Annual reported operating profit as a share of sales22.7%derived
- Annual e-commerce share of company sales20.0%reported
Evidence for
- Fiscal 2026 operating margin declined 0.016 to 0.227, including pressure from unfavorable mix, product investment, restructuring, tariffs, commodities, and higher marketing spending.[P&G 2026 Form 10-K]· primary
Evidence against
- Manufacturing productivity benefited gross margin by 0.018 and productivity savings benefited selling and administrative costs by 0.016 of sales in fiscal 2026.[P&G 2026 Form 10-K]· primary
Tax rate21.5%medium
How derived: The effective rate rose from 0.202 in fiscal 2024 to 0.208 in fiscal 2026, and unfavorable geographic mix remains a risk, so this case places the rate above management's approximately 0.20 core-rate outlook.
Why this confidence: Three years of audited tax-rate history ↑, Geographic mix and tax-law variability ↓
No tracked driver measures this assumption yet.
Evidence for
- P&G's reported effective tax rate increased to 0.208 in fiscal 2026, partly because of unfavorable geographic mix and lower share-compensation tax benefits.[P&G 2026 Form 10-K]· primary
Evidence against
- Management expects an approximately 0.20 core effective tax rate in fiscal 2027 and does not currently expect Pillar Two rules to have a material effect.[P&G FY2026 results]· primary
Reinvestment rate18.0%low
How derived: Capital spending increased to $4.409 billion from $3.773 billion while P&G continued product, packaging, and restructuring investments, so this case reserves 0.18 of after-tax operating profit for capital and working-capital needs.
Why this confidence: Audited capital-spending and cash-flow data ↑, Model rate combines capital expenditure and working capital ↓
Measured by
- Annual adjusted free-cash-flow productivity100.0%reported
Evidence for
- Capital spending rose 0.169 to $4.409 billion in fiscal 2026, and product and packaging investment reduced gross margin by 0.007 of sales.[P&G 2026 Form 10-K]· primary
Evidence against
- Adjusted free-cash-flow productivity was 1.00 in fiscal 2026, indicating that current operations converted nearly all adjusted earnings into cash despite higher capital spending.[P&G 2026 annual report]· primary
Terminal growth1.8%low
How derived: Organic growth slowed from 0.04 in fiscal 2024 to 0.02 in fiscal 2025 and 0.01 in fiscal 2026, so the mature-state assumption remains below recent nominal Treasury yields and allows only modest long-run pricing and population growth.
Why this confidence: Multi-year organic-growth trend ↑, Terminal horizon extends beyond observable guidance ↓
Measured by
- Annual organic sales growth1.0%reported
- Annual e-commerce share of company sales20.0%reported
Evidence for
- P&G's annual organic-sales growth decelerated from 0.04 in fiscal 2024 to 0.02 in fiscal 2025 and approximately 0.01 in fiscal 2026.[P&G annual results history]· primary
Evidence against
- All geographic regions held or grew organic sales in fiscal 2026, with enterprise markets up 0.04 and Latin America up 0.06.[P&G 2026 annual report]· primary
Base
low confidence$147.63
IV / share
+0.8% vs $146.44
- Explicit cash flows
- $26.10
- Terminal value
- $129.55
- Net cash
- -$8.01
- Intrinsic value / share
- $147.63
87.7% of the value rests on the terminal value — high dependency. A small change to terminal growth moves the valuation a lot — see terminal growth below.
Revenue growth2.0% → 2.5% → 2.8% → 3.0% → 3.0%medium
How derived: The path begins at the midpoint of management's 0.01-to-0.03 fiscal 2027 sales guidance and gradually returns toward 0.03 as improving second-half share trends, innovation, pricing, and developing-market growth offset mature-market softness.
Why this confidence: Management's explicit first-year range ↑, Later years depend on an unproven acceleration ↓
Measured by
- Annual organic sales growth1.0%reported
- Annual e-commerce share of company sales20.0%reported
Price implies: 2.5% vs our 2.7% — one of several sets that fit this price
Evidence for
- Management guided both reported and organic fiscal 2027 sales growth to 0.01-0.03 and said fiscal 2026 growth improved from approximately 0.01 in the first half to 0.02 in the second half.[P&G FY2026 results]· primary
Evidence against
- Fiscal 2026 volume and mix were unchanged and fourth-quarter organic sales were flat, leaving little evidence yet of a sustained acceleration.[P&G FY2026 results]· primary
Operating margin23.0%medium
How derived: Starting from fiscal 2026's 0.227 margin, this case assumes productivity and completion of the restructuring program modestly outweigh ongoing brand investment and input-cost pressure.
Why this confidence: Detailed audited productivity and cost bridge ↑, Commodity, tariff, and advertising variability ↓
Measured by
- Annual reported operating profit as a share of sales22.7%derived
- Annual e-commerce share of company sales20.0%reported
Price implies: 22.8% vs our 23.0% — one of several sets that fit this price
Evidence for
- Fiscal 2026 manufacturing productivity added 0.018 of sales to gross margin and selling and administrative productivity contributed 0.016 of sales.[P&G 2026 Form 10-K]· primary
Evidence against
- Management expects approximately $1 billion after tax of fiscal 2027 raw-material, energy, and transportation pressure, while fiscal 2026 margin fell to 0.227.[P&G FY2026 results]· primary
Tax rate20.5%high
How derived: The assumption sits between the fiscal 2026 reported rate of 0.208 and management's approximately 0.20 fiscal 2027 core-rate guidance, reflecting broadly stable tax economics with normal discrete-item variability.
Why this confidence: Stable audited history and explicit guidance ↑, Potential discrete tax items ↓
No tracked driver measures this assumption yet.
Evidence for
- Reported effective tax rates were 0.202, 0.203, and 0.208 in fiscal 2024, 2025, and 2026, respectively, and management expects approximately 0.20 in fiscal 2027.[P&G 2026 Form 10-K]· primary
Evidence against
- P&G identifies geographic mix, share-compensation tax benefits, audits, and evolving international tax rules as sources of rate volatility.[P&G 2026 Form 10-K]· primary
Reinvestment rate12.0%medium
How derived: P&G generated 1.00 adjusted free-cash-flow productivity despite capital spending equal to about 0.051 of sales, so a 0.12 share of after-tax operating profit is retained to support factories, products, packaging, and working capital.
Why this confidence: Strong reported cash conversion ↑, Future working-capital requirements are not guided ↓
Measured by
- Annual adjusted free-cash-flow productivity100.0%reported
Evidence for
- Fiscal 2026 adjusted free cash flow was $15.835 billion after $4.409 billion of capital spending, producing adjusted free-cash-flow productivity of 1.00.[P&G 2026 Form 10-K]· primary
Evidence against
- Capital spending increased from $3.773 billion to $4.409 billion, and the company is funding product, packaging, portfolio, and supply-chain work.[P&G 2026 Form 10-K]· primary
Terminal growth2.3%low
How derived: The mature-state rate lies below the company's recent five-year nominal revenue trend but above the bear case because daily-use categories, pricing power, developing markets, and digital distribution should roughly track long-run nominal consumption.
Why this confidence: Broad geographic and category diversification ↑, Very long forecast horizon ↓
Measured by
- Annual organic sales growth1.0%reported
- Annual e-commerce share of company sales20.0%reported
Evidence for
- P&G sells daily-use products in about 180 countries and reported positive fiscal 2026 organic sales across every geographic region.[P&G 2026 Form 10-K]· primary
Evidence against
- Organic growth slowed to approximately 0.01 in fiscal 2026, and only five of ten product categories held or gained global market share.[P&G 2026 annual report]· primary
Bull
low confidence$194.63
IV / share
+32.9% vs $146.44
- Explicit cash flows
- $30.24
- Terminal value
- $172.40
- Net cash
- -$8.01
- Intrinsic value / share
- $194.63
88.6% of the value rests on the terminal value — high dependency. A small change to terminal growth moves the valuation a lot — see terminal growth below.
Revenue growth3.0% → 4.0% → 4.5% → 4.5% → 4.0%low
How derived: The path starts at the top of management's fiscal 2027 range and assumes Beauty's 0.05 organic growth, improving market share, strong developing markets, and innovation spread across the portfolio.
Why this confidence: Measured strength in selected categories and markets ↑, Forecast exceeds management's near-term range after year one ↓
Measured by
- Annual organic sales growth1.0%reported
- Annual e-commerce share of company sales20.0%reported
Evidence for
- Beauty achieved 0.05 organic growth, enterprise markets grew 0.04, Latin America grew 0.06, and Greater China grew 0.04 in fiscal 2026.[P&G 2026 annual report]· primary
Evidence against
- Total-company fiscal 2026 organic growth was only 0.01, fourth-quarter organic growth was flat, and fiscal 2027 guidance tops out at 0.03.[P&G FY2026 results]· primary
Operating margin24.5%low
How derived: This case restores profitability slightly above fiscal 2025's 0.243 level as restructuring ends, productivity compounds, volume improves fixed-cost absorption, and premium Beauty mix offsets continued brand investment.
Why this confidence: Prior-year margin demonstrates attainability ↑, Requires several cost and mix improvements simultaneously ↓
Measured by
- Annual reported operating profit as a share of sales22.7%derived
- Annual e-commerce share of company sales20.0%reported
Evidence for
- Fiscal 2025 operating margin reached 0.243, while fiscal 2026 manufacturing and selling-administration productivity delivered substantial savings that could remain after restructuring costs subside.[P&G 2026 Form 10-K]· primary
Evidence against
- Fiscal 2026 operating margin fell to 0.227, and management expects approximately $1 billion after tax of additional raw-material, energy, and transportation costs in fiscal 2027.[P&G FY2026 results]· primary
Tax rate19.5%low
How derived: The rate is modestly below management's approximately 0.20 fiscal 2027 outlook and assumes favorable geographic mix and recurring foreign-derived-income and tax-credit benefits approach the better end of recent outcomes.
Why this confidence: Documented recurring tax benefits ↑, Assumption is below current guidance ↓
No tracked driver measures this assumption yet.
Evidence for
- Foreign-derived intangible income, foreign tax credits, and share-compensation benefits reduced P&G's fiscal 2026 effective tax rate from the statutory starting point.[P&G 2026 Form 10-K]· primary
Evidence against
- The reported rate increased to 0.208 in fiscal 2026 and management guides to approximately 0.20 rather than a rate below 0.20.[P&G FY2026 results]· primary
Reinvestment rate9.0%low
How derived: The case assumes P&G's asset-light brand economics and productivity allow faster sales growth while retaining only 0.09 of after-tax operating profit, consistent with fiscal 2026 adjusted free-cash-flow productivity of 1.00.
Why this confidence: Strong current cash conversion ↑, Low reinvestment alongside faster growth is demanding ↓
Measured by
- Annual adjusted free-cash-flow productivity100.0%reported
Evidence for
- P&G generated $15.835 billion of adjusted free cash flow in fiscal 2026 and reported adjusted free-cash-flow productivity of 1.00.[P&G 2026 Form 10-K]· primary
Evidence against
- Capital spending rose to $4.409 billion in fiscal 2026, and a faster growth path may require additional capacity, innovation, and working capital.[P&G 2026 Form 10-K]· primary
Terminal growth2.7%low
How derived: The upper case assumes P&G's daily-use products, global reach, premium innovation, developing-market expansion, and growing digital channel sustain nominal growth near 0.027 after the explicit forecast.
Why this confidence: Global daily-use product exposure ↑, Permanent-growth assumption exceeds recent organic performance ↓
Measured by
- Annual organic sales growth1.0%reported
- Annual e-commerce share of company sales20.0%reported
Evidence for
- E-commerce reached 0.20 of company sales, enterprise markets grew 0.04, and P&G serves about 180 countries and territories.[P&G 2026 annual report]· primary
Evidence against
- Total organic sales grew only 0.01 in fiscal 2026, with flat company volume and declining organic sales in Baby, Feminine and Family Care.[P&G 2026 Form 10-K]· primary
Valuation robustness
reliability of the estimate, not a stock rating58 / 100 · Moderate
Formula v1.0.0. Higher means a more reliable estimate — not a recommendation.
Quality checks
Automated model-risk flags — warnings, not recommendations.
- 88% of the intrinsic value rests on the terminal value — a small change to terminal growth moves the valuation a lot.→ terminal growth
- The terminal growth assumption is low-confidence.→ terminal growth
Per-share economics
Business growth after changes in the diluted share count.
| Period | Revenue growth | FCF/share | FCF/share growth | Shares | Share growth |
|---|---|---|---|---|---|
| Q1 2025 | -0.6% | 1.34 | -16.5% | 2.47B | -0.4% |
| Q2 2025 | 2.1% | 1.59 | -8.6% | 2.46B | -0.4% |
| Q3 2025 | -2.1% | 1.16 | -12.7% | 2.45B | -0.9% |
| Q1 2026 | 3.0% | 1.73 | 28.7% | 2.44B | -1.2% |
| Q2 2026 | 1.5% | 1.57 | -1.1% | 2.42B | -1.4% |
| Q3 2026 | 7.4% | 1.25 | 7.8% | 2.42B | -1.4% |
Valuation history every run
History builds as the valuation is recalculated — this is the first recorded run.
Market inputs researched
The latest available U.S. Treasury daily curve before the valuation date reported a 0.0477 ten-year par yield, used as the nominal U.S.-dollar risk-free rate.
The published market beta of 0.38 is used as a current regression-based measure of PG's comparatively defensive equity sensitivity.
The 0.0418 trailing-twelve-month adjusted-payout implied premium published for the U.S. market on 2026-07-01 is used rather than a historical-return average.
The latest completed regular-session closing price available at the valuation date was $146.44 on 2026-09-04.
Generated 9/5/2026, 5:08:23 PM · pipeline v1.2.0