Is The Procter & Gamble Company (PG) overvalued or undervalued?
Updated Nov 10, 2026 · hand-researched model · educational, not advice
At a recent price of $168.32, The Procter & Gamble Company (PG) sits inside a range too wide to call either way: our valuation lenses put the business somewhere between $48.22 and $217.22 per share. They disagree too widely for us to state a single fair value. We publish the range rather than a midpoint because a number that precise would claim more than the methods can support. This is an educational model, not a price target or a recommendation.
The valuation discounts The Procter & Gamble Company's projected free cash flows at a weighted-average cost of capital (WACC) of 7.0%, with a long-run terminal growth rate of 2.5%. About 81% of the enterprise value comes from the terminal value — the portion beyond the explicit forecast window — which is typical for a stable, cash-generative business and a reminder that small changes in the discount rate or terminal growth assumption swing the intrinsic value meaningfully.
Running the DCF in reverse — solving for the growth the current price already assumes — the market is implying roughly 3.5% annual revenue growth for PG. Our base case instead compounds to about 2.6% a year over the same forecast, so the market's implied growth is broadly in line with our base case. The reverse-DCF is a quick sanity check: it reframes 'is this stock cheap?' as 'do I believe the growth the price requires?' rather than arguing over a single point estimate of fair value.
Sensitivity matters more than any single number. Across a reasonable band of discount-rate assumptions, PG's modeled DCF value ranges from about $88.14 to $310.47 per share. If that range still sits below today's price, the market is optimistic relative to the model across the whole band; if it brackets the price, the stock is roughly fairly valued on our assumptions. Use the interactive slider to see exactly where your own cost-of-capital view lands.
How to read this page: the DCF fair value is what The Procter & Gamble Company would be worth if its cash flows grow as modeled and are discounted at the stated WACC. The assumptions table shows every input and its source; the reverse-DCF shows what the market believes; the sensitivity band shows how fragile the answer is. None of this is investment advice — it is a transparent, auditable framework for forming your own view of PG's intrinsic value. Figures update as new filings and prices come in.
The assumptions behind PG's DCF
| Input | Value | Source |
|---|---|---|
| Base-year revenue | $87,032,000,000 | P&G FY2026 10-K (accession 0000080424-26-000103, filed 2026-08-04), Consolidated Statements of Earnings: Net sales FY2026 (fiscal year ended 2026-06-30) $87,032M, +3.3% on FY2025's $84,284M. REPORTED vs ORGANIC: P&G's own bridge (Q4 release, 8-K Ex-99.1) splits the +3% into +2 points of FOREIGN EXCHANGE TAILWIND and +1 point of organic growth (all pricing; volume and mix flat); acquisitions and divestitures were ~0. This model is built on REPORTED dollars, because reported dollars are what get discounted; currency is handled by not forecasting any (see forecast.revenue_growth). FX has usually run the other way: it cost 5 points in FY2023, 2 in FY2024 and 1 in FY2025 (Q4 FY2026 slides, accession 0000080424-26-000097). CROSS-CHECK against the latest quarter: Q4 FY2026 (April-June) net sales $21,203M, +2% reported, organic 0% — the weakest quarter of the year (Q1-Q3 organic +2%, 0%, +3%). The pending $3.8B Thorne acquisition (signed 2026-08-04, ~$0.5B of revenue) is NOT in this base or the forecast — see special_cases. |
| Base EBIT margin | 22.7% | P&G Q4/FY2026 earnings release, 8-K Ex-99.1 (accession 0000080424-26-000093, filed 2026-07-29), Consolidated Earnings Information and Exhibit 1 reconciliation: GAAP operating income $19,748M / $87,032M = 22.69%. Core (non-GAAP) operating income $20,497M = 23.55%: the $749M gap is 'incremental' restructuring under the June-2025 portfolio and productivity plan (separation, asset write-downs, accelerated depreciation), recorded in cost of products sold ($436M) and SG&A ($313M). P&G's NORMAL restructuring of $250-500M a year stays INSIDE core, so core is not a flattering measure here. History: GAAP operating margin 22.2% (FY2022), 22.1% (FY2023), 22.1% (FY2024, after a $1.3B Gillette intangible impairment), 24.3% (FY2025; core 24.27%), 22.7% (FY2026). EBIT here EXCLUDES the $1,076M of other non-operating income (FY2026 includes a $343M pretax gain on the Glad joint-venture dissolution) and net interest. CROSS-CHECK: Q4 FY2026 GAAP operating margin 18.6%, core 19.5%, down 130bp year on year on core as marketing reinvestment (+410bp of sales) outran 300bp of SG&A productivity. This base figure is used only for the engine's peak-margin test; the valuation runs off the forecast margins. |
| Forecast revenue growth | 2% → 2% → 3% → 3% → 3% | Assumption — TickerWorth's 5-year explicit forecast |
| Risk-free rate | 5.2% | US 10Y Treasury constant maturity (FRED DGS10): 5.24% on 2026-10-01, the latest published observation. Shared by every model in this tracker. |
| Beta | 0.41 | Assumption — Published 5Y-monthly beta (yfinance, read 2026-10-03) + own 10-year monthly regression vs S&P 500: NORMALIZED UP from the published 0.377 to 0.41 — the SAME METHOD this tracker used for Coca-Cola (0.342 to 0.47) and PepsiCo (0.361 to 0.48): replace the published 5-year figure with my own 10-year monthly regression against the S&P 500 (yfinance dividend-adjusted closes, 120 complete months, Oct-2016 to Sep-2026), because it spans more than one regime. For P&G that regression gives 0.413 (5-year 0.387, 3-year 0.348, 2-year weekly 0.249 — P&G's beta is steadier than KO's or PEP's, so the normalization is small). CHECK AGAINST THE COST OF DEBT: cost of equity = 5.24% + 0.41 x 5.0% = 7.29%, 169bp above the ~5.6% marginal pre-tax cost of new P&G debt — the same 169bp gap Coca-Cola's file carries (7.59% vs 5.9%) and close to PepsiCo's 174bp (7.64% vs 5.9%), so equity is not priced implausibly close to the bonds. At the published 0.377 the gap would be 152bp. CONSERVATIVE vs published (it lowers the value); the Blume-adjusted published beta would be 0.585, more conservative still. Each 0.1 of beta is worth roughly $15/share (0.51 gives $124.50; the published 0.377 gives $143.27), because P&G's WACC is low and its terminal value is large. |
| Terminal growth | 2.5% | Assumption — house default: House default 2.5% (roughly long-run nominal GDP), kept for comparability with every other company in this tracker. For P&G it is about right: global category growth is running ~2% (CFO, Q4 FY2026 call), P&G's stated aim is to grow at or above its categories, and the model is in dollars, where currency has more often subtracted than added. 2.0% takes ~$12.50/share off ($125.61); 3.0% adds ~$15.60 ($153.78). The price needs ~2.7% forever. Must remain < WACC of 7.03%. |
| Diluted shares | 2,413M | P&G Q4/FY2026 earnings release, 8-K Ex-99.1 (accession 0000080424-26-000093), Consolidated Earnings Information: Diluted weighted-average common shares, Q4 FY2026 (three months to 2026-06-30): 2,412.7M (FY2026 2,422.5M; Q4 FY2025 2,443.8M). This count TREATS THE ESOP'S CONVERTIBLE PREFERRED AS CONVERTED (Series A 18M + Series B 48.6M shares, 10-K Note 8, each convertible one-for-one), so the $756M of preferred in equity is not deducted separately — it is in the denominator. Basic common shares outstanding were 2,324.4M at 2026-07-31. The count is falling ~1.3% a year: P&G guides ~$5B of buybacks in FY2027 after $5.0B in FY2026. |
| Market price | $168.32 | Delayed quote · as of 2026-11-10 05:59 UTC |
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