Procter & Gamble (PG:NYS) Fundamental Valuation Report

Fundamental Valuation Report

Procter & Gamble(PG:NYS)

Consumer Defensive:Household & Personal Products

This Report was generated using the valuation tools available on For a free 30 day trial click here.

Close Price/Date
$92.70 (USD) 12/11/2018

Weighted Valuation
$88.95 (USD)

Overall Rating
Fairly valued to slightly Overvalued by 4.0%

Valuation Models Analyst Consensus: $87.20 (USD)
(in order of importance) Discounted Cash Flow: $93.66 (USD)
Comparables: $84.78 (USD)
Valuation Methods This company is:
Cash Flow: Fairly valued on a Cash Flow Valuation
Comparable Company: Overvalued on a Comparable Valuation
Asset: Overvalued on an Asset Valuation

Company Overview (PG:NYS USD)

Price 92.70
Range 91.75 – 93.45
52 week 70.94 – 92.70
Open 92.21
Vol / Avg. 12.27M/12.96M
Mkt cap 230.95B
P/E 24.20
Div/yield 2.79/0.03
EPS 3.67
Shares 2.49B
Beta 0.37

Company Description

Since its founding in 1837, Procter & Gamble has become the world’s largest consumer product manufacturer. It operates with a lineup of leading brands, including 21 that generate more than $1 billion in annual global sales such as Tide laundry detergent, Charmin toilet paper, Pantene shampoo, and Pampers diapers. P&G sold its last remaining food brand, Pringles, to Kellogg in 2012. Sales beyond its home turf represent around 55% of the firm’s consolidated total, with around one third coming from emerging markets.

Valuation Details

 We have up to 6 valuation points for each company. Details are at the bottom of the report.

Discounted Cash Flow and Sensitivity Analysis for PG:NYS

Using a discounted cash flow model we generated an intrinsic value of $93.66 (USD) for PG:NYS

Sensitivity Analysis

(showing how changes in the input variables impact the DCF calculation)

PG:NYS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $93.66 1% 5% 1% 5%
WACC (or Ke) 5.54 $120.08 $75.99
Terminal Growth Rate 0.50 $77.67 $117.57
Tax Rate 0.26 $100.50 $86.82
Cash Flow 17,445,091,500 $88.60 $98.72
Capital Expenditures 0 $93.66 $93.66
Long Term Debt 31,125,000,000 $94.28 $93.03

* Changes are absolute: ex WACC from 8% to 7%

Comparables Model

Using similar companies and price based ratios we generated a valuation of $84.78 (USD) for PG:NYS. We also generated a valuation of $94.29 (USD) using other metrics and comparables.
The comparable companies were and Unilever (UN:NYS).

Company PG:NYS End Date Value
Earnings/Share $3.83 (USD)
Book Value/Share $20.58 (USD)
Sales/Share $25.36 (USD)
Cash Flow/Share $5.61 (USD)
EBITDA/Share $6.32 (USD)
Price Based on Comps Adjustment Factor (%)
$83.66 (USD) -19.6
$225.29 (USD) -77.6
$63.38 (USD) 72.8
$85.88 (USD) 2.8
$91.64 (USD) 20.5
PG:NYS Ratios Used Average Values UN:NYS
23.15 PE Ratio 21.84 21.84
4.31 PB Ratio 10.94 10.94
3.50 PS Ratio 2.50 2.50
15.80 PCF Ratio 17.41 17.41
14.38 EV to EBITDA 14.50 14.50


Using a multiples approach we generated a valuation of  $86.80 (USD) for PG:NYS

Company PG:NYS End Date Value
Earnings/Share $3.83 (USD)
Book Value/Share $20.58 (USD)
Sales/Share $25.36 (USD)
Cash Flow/Share $5.61 (USD)
EBITDA/Share $6.32 (USD)
Price Based on Comps Adjustment Factor
$92.74 (USD) 0
$78.26 (USD) 0
$83.45 (USD) 0
$88.04 (USD) 0
$91.51 (USD) 0
Ratios Ratio Average
PE Ratio 24.21
PB Ratio 3.80
PS Ratio 3.29
PCF Ratio 15.68
EV to EBITDA 14.48

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  PG:NYS for the last 10 years was  3.76

We ran the Adjusted Book Value for  PG:NYS and generated a book value of  $20.91 (USD)
By multiplying these we get an adjusted valuation of  $78.71 (USD)

Analyst Data

In the Stockcalc database there are 5 analysts that provide a valuation for PG:NYS. The 5 analysts have a concensus valuation for PG:NYS for 2019 of $87.20 (USD).

PG:NYS Procter & Gamble

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
1 5 0 3.4286 Hold 2018-11-9

Current Price: 92.7 USD

Analyst Consensus
USD Millions 2019 2020 2021
Mean EPS 4.44 4.71 4.98
# EPS Analysts 7 7 3
Mean Revenue 66,638.40 68,727.20 70,565.20
# Revenue Analysts 5 5 4
Mean Target Price 87.20
Mean Cash Flow 5.66 5.68 5.88
Mean EBITDA 17,082.20 17,012.20 17,358.30
Mean Net Income 11,223.60 11,784.20 12,138.60
Mean Debt Outstanding 30,360.10 31,571.10 31,947.10
Mean Tax Rate
Mean Growth Rate 6.99
Mean Capital Expenditure 3,566.50 3,422.90 3,519.30

Explanation of Valuation Models

We have up to 6 valuation points for each company in the database.

The Discounted Cash Flow (DCF) valuation is a cash flow model where cash flow projections are discounted back to the present to calculate value per share. DCF is a common valuation technique especially for companies undergoing irregular cash flows such as resource companies (mining, forestry, oil and gas) going though price cycles or smaller companies about to generate cash flow (junior exploration companies, junior pharma, technology firms…).

The Price Comparables valuation is the result of valuing the company we are looking at on the basis of ratios from selected comparable companies: Price to Earnings, Price to Book, Price to Sales, Price to Cash Flow, Enterprise Value (EV) to EBITDA. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

We have included the Other Comparables as a way to value companies that cannot be valued using Earnings based ratios. This technique is very useful for companies still experiencing negative cash flows such as mining exploration firms. We use Cash/Share, Book Value/Share, MarketCap, 1 Year Return, NetPPE as the ratios here. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

Multiples are similar to Price comparables where we look at current or historic ratios for the company in question to assess what it should be worth today based on those historic ratios. We use the same 5 ratios as in the price comparables and value the company with its historic averages.

With Adjusted Book Value (ABV) we calculate the book value per share for the company based on its balance sheet and multiply that book value per share by its historical price to book ratio to calculate a value per share.

If we have Analyst coverage for the company we use the consensus target price here.

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