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PG is a mature dividend payer with unmatched brand equity, generating consistent $14B+ in free cash flow to support a 61.8% payout ratio and steady buybacks. While structurally low-growth, its cash generation is highly resilient. Current valuation models anchor fair value at $163.44, implying 11.56% upside from the current $146.50 price. Fair value range: low $139, high $188, with mid-point at $163.
Stock analysis

PG The Procter & Gamble Company fair value $163–$188

PG
By StockMarketAgent.AI team· supervised by
Analyzed: 2026-05-08Next update: 2026-08-08Methodology v2.4Archetype: Mature dividendNYSE · Consumer Staples
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Last price
$146.50
▲ +16.94 (+11.56%)
Fair value
$163
$163–$188
Rating
Buy
confidence 88/100
Upside
+11.6%
upside to fair value
Margin of Safety
$138.92
buy below · 15%
Market Cap
$341.2B
P/E fwd 20.7

§1 Executive summary

  • Unmatched brand equity and pricing power secure a wide economic moat.
  • Generates $14B+ in annual FCF, fully covering a safe 61.8% dividend payout.
  • Synthesized fair value of $163.44 perfectly aligns with street consensus targets.
  • Key risk involves volume erosion from consumer trade-down to private labels.
Fair value
$163
Margin of safety
+10.4%
Confidence
88/100
Moat
9/10

Educational analysis only — not financial advice. Always do your own due diligence.

$146.51Price
FV $163.44
High $188.03

PG is a mature dividend payer with unmatched brand equity, generating consistent $14B+ in free cash flow to support a 61.8% payout ratioPayout ratioDividends per share divided by EPS. Measures how much of earnings the company distributes versus retains for reinvestment. and steady buybacks. While structurally low-growth, its cash generation is highly resilient. Current valuation models anchor fair valueFair valueOur composite estimate of intrinsic per-share value, blended across DCF, exit-multiple, and reverse-DCF methods. Reported as a low/mid/high range to capture model uncertainty. at $163.44, implying 11.56% upside from the current $146.50 price.

  • Unmatched brand equity across 65+
    Unmatched brand equity across 65+ category-leading brands.
  • Immense pricing power evidenced by
    Immense pricing power evidenced by 51%+ gross margins.
  • Bull thesis
    Valuation: FCFF DCF indicates fair value of $163.44, closely matching the street consensus of $163.77.

§2 Bear case

A sustained consumer recession forces widespread trade-down to private labels, breaking PG's pricing power. Volume contraction outpaces pricing actions, compressing operating margins below 20%.

Ways this thesis can break

Private Label Ascendancy

· Low

Extended consumer weakness permanently shifts market share to private labels, structurally lowering terminal growth.

FV impact
-15%
Trigger
1-3 Years

Margin Compression

· Medium

Inability to pass on sustained commodity inflation due to elastic demand, collapsing operating margins back to low-20s.

FV impact
-20%
Trigger
1-2 Years

FX Headwinds

· High

Persistent structural strength in the USD suppressing international revenue and earnings translation over a multi-year cycle.

FV impact
-5%
Trigger
1-2 Years
Early-warning signals to monitor
MetricCurrentTrigger threshold
Consecutive quarters of negative organic volume growth.MonitorDeterioration versus the report thesis
Gross margin falling permanently below 48%.MonitorDeterioration versus the report thesis
Operating margin compressing below 21%.MonitorDeterioration versus the report thesis
Rising SG&A as a percentage of revenue without corresponding top-line expansion.MonitorDeterioration versus the report thesis
Dividend growth falling below 3% annually.MonitorDeterioration versus the report thesis

§3 Financial history

Income statement — last six periods
Line itemT−0T−1T−2T−3CAGR
Period2022-06-302023-06-302024-06-302025-06-30Trend
Revenue$80.19B$82.01B$84.04B$84.28B+1.7%
Gross profit$38.03B$39.25B$43.19B$43.12B+4.3%
Operating income$17.81B$18.13B$19.89B$20.45B+4.7%
Net income$14.74B$14.65B$14.88B$15.97B+2.7%
EPS (diluted)$5.81$5.90$6.02$6.51+3.9%
EBITDA$21.24B$21.82B$22.58B$23.92B+4.0%
R&D—————
SG&A$20.22B$21.11B$23.31B$22.67B+3.9%

Quality scores

Piotroski F-score
6 / 9
0–9 quality composite
Altman Z-score
5.39
Bankruptcy risk (>3 safe)
Beneish M-score
-2.53
Earnings manipulation risk
OCF / Net income
1.12×
>1 indicates high earnings quality
Accounting quality gate
Pass
Sector-adjusted gate
ROIC
19.0%
Return on invested capital
§3

Numbers analysis

Individual subscribers — §4 onwards11 more sections

Read the full analysis — 11 more sections.

Competitive moat, industry cycle, peer comparison, intrinsic valuation, sensitivity, scenarios, earnings decision tree, position management, investor perspectives, scorecard, and final recommendation.

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FAQ

PG — frequently asked questions

  1. Based on our latest analysis, PG looks modestly undervalued. The current price is $147 versus a composite fair-value midpoint of $163 (range $139–$188), which implies roughly 11.6% upside to the midpoint.

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