The Procter & Gamble Company (PG) Intrinsic Value & DCF Valuation
Household & Personal Products · NYSE
Current Price
$146.15
Intrinsic Value
$129.29
-13.0% margin of safety
What Is The Procter & Gamble Company's Intrinsic Value?
As of 2026-07-29, the base-case DCF model estimates the intrinsic value of The Procter & Gamble Company (PG) at $129.29 per share, compared with a market price of $146.15, a margin of safety of -13.0%. The base case assumes 2.6% annual free cash flow growth and a 10.0% discount rate.
Across the sensitivity grid the estimate spans $105.14 to $157.11. Intrinsic value is an estimate built on assumptions, not a fact. A higher discount rate or slower growth pushes the estimate down, while stronger cash flow growth lifts it.
How the DCF works · Recalculate with your own assumptions · What is intrinsic value?
Is The Procter & Gamble Company (PG) Undervalued?
At $146.15, PG trades about 13.0% above the base-case intrinsic value estimate, a modest premium. By this model the price sits within a normal band, though faster growth than assumed would change the picture.
COMPETITIVE MOAT
↑Brand Equity and Consumer Trust
PG's iconic brands like Pampers and Tide possess immense consumer loyalty. This trust translates into pricing power and repeat purchases, a significant barrier to new entrants.
↑Scale and Distribution Network
The company's vast global manufacturing and distribution infrastructure allows for efficient product delivery and cost advantages. This scale is difficult for smaller competitors to replicate.
↑Product Innovation and R&D
Continuous investment in research and development fuels a pipeline of innovative products. This keeps PG at the forefront of consumer needs and preferences.
INVESTMENT RISKS
↓Input Cost Volatility
Fluctuations in raw material prices can impact profit margins. PG's reliance on various commodities makes it susceptible to supply chain disruptions and cost increases.
↓Intense Competition
The household and personal products industry is highly competitive. PG faces constant pressure from both established players and agile disruptors.
↓Regulatory Scrutiny
Changes in environmental, health, and safety regulations can necessitate costly product reformulation or manufacturing process adjustments.
Base case
PG base case valuation
Intrinsic Value
$129.29
Margin of safety
-13.0%
Expected annual return
-2.4%
Base case assumptions: 2.6% annual growth, 10.0% discount rate, 21x exit multiple, 5 year projection. Data as of 2026-07-29.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the PG valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for The Procter & Gamble Company respond.
Open DCF Calculator for PGCompany Overview
The Procter & Gamble Company, commonly referred to as P&G, is a global enterprise that supplies a broad spectrum of branded consumer products to markets worldwide. The company's operations are divided into five main business divisions: Beauty; Grooming; Health Care; Fabric & Home Care; and Baby, Feminine & Family Care. The Beauty segment offers an assortment of hair care products, including conditioners, shampoos, styling aids, and treatments, under popular names like Head & Shoulders, Herbal Essences, Pantene, and Rejoice. It also features antiperspirants, deodorants, personal cleansing solutions, and skin care items from brands such as Olay, Old Spice, Safeguard, Secret, and SK-II. Within the Grooming division, P&G provides a range of shave care products and grooming appliances, prominently featuring brands like Braun, Gillette, and Venus. The Health Care unit encompasses oral hygiene essentials, including toothbrushes, toothpastes, and other dental care products sold under the Crest and Oral-B brand names. This segment further extends to gastrointestinal remedies, rapid diagnostics, respiratory care, vitamins/minerals/supplements, pain relief, and various other personal health care items from brands such as Metamucil, Neurobion, Pepto-Bismol, and Vicks. In the Fabric & Home Care category, consumers find fabric enhancers, laundry additives, and laundry detergents through labels like Ariel, Downy, Gain, and Tide. Additionally, this division offers air care products, dishwashing solutions, professional cleaning supplies (P&G Professional), and surface cleaners, exemplified by brands such as Cascade, Dawn, Fairy, Febreze, Mr. Clean, and Swiffer. Finally, the Baby, Feminine & Family Care segment provides infant care products, including baby wipes, taped diapers, and pants, under the Luvs and Pampers brands. It also supplies adult incontinence and feminine hygiene products from Always, Always Discreet, and Tampax, along with paper towels, tissues, and toilet paper marketed as Bounty, Charmin, and Puffs. P&G distributes its extensive product portfolio through a vast commercial network, including large retail chains, e-commerce platforms, grocery stores, membership clubs, pharmacies, department stores, various distributors, wholesalers, specialty beauty retailers, high-frequency stores, electronics outlets, and professional channels, as well as direct-to-consumer sales. The Procter & Gamble Company was established in 1837 and its corporate headquarters are located in Cincinnati, Ohio.
Financial Metrics — PG Stock Valuation Data
Revenue/Share (TTM)
$35.93
FCF/Share (TTM)
$6.57
ROIC (TTM)
15.8%
ROE (TTM)
29.8%
P/FCF
21.4x
EV/EBITDA
17.2x
FCF Yield
4.68%
Debt/Equity
0.63x
On a trailing twelve-month basis, PG generates free cash flow per share of $6.57 alongside a ROIC of 15.8%, both central inputs for a DCF valuation. Its P/FCF ratio of 21.4x and FCF yield of 4.68% then frame how PG is priced against peers on a cash flow basis.
Frequently Asked Questions
What is the intrinsic value of PG?
The Procter & Gamble Company currently generates $6.57 in free cash flow per share. At the current price of $146.15, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is PG undervalued?
PG trades at a P/FCF ratio of 21.4x with a free cash flow yield of 4.68%. This P/FCF is in a moderate range. However, whether PG is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value PG stock using DCF?
To perform a DCF valuation on The Procter & Gamble Company: (1) Start with the trailing free cash flow per share ($6.57) as the base, (2) project future FCF growth over 5-10 years based on Household & Personal Products industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting PG's risk profile — with a debt-to-equity of 0.63x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to PG?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For The Procter & Gamble Company, this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Household & Personal Products trends, then discounting those amounts to today's dollars. PG's ROIC of 15.8% reflects how efficiently the company converts invested capital into profit.
How does WACC affect PG stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For PG, with a debt-to-equity ratio of 0.63x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 17.2x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See PG PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Consumer Defensive valuationsDCF and P/E value PG with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-07-29. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.