▶ Full Post Text
(This valuation was done on pen and paper, you can view it on my reddit home page.)
(0) Procter & Gamble. $PG FY End June 2025. Reporting on Q2. Today is Jan 26 2026
(1) Share Price: 150.15, Market Cap : 350bn Revenue: 85.26bn
(2) EPS (diluted): 6.75 EPS(Norm): 6.89\* (different with nos. below)
(3) yield (dividend): 2.82% Buyback yield: 1.60%
(4) ROA, ROE, ROIC: 13.51%, 32.36% and 19.58%
(5) P/E: 22.45 P/E (Norm): 22.15. P/E (5YA): 23.53 P/E (FWD): 20.66
(6) P/S: 4.29 (3YA): 4.65 (5YA): 4.69
(7) D/E: 0.48 - 0.69 Net Debt / EBITDA: (25.58+11bn - 10.83b)/ 24bn = 1.1
(8) FCF / NI, average > 0.8 (ttm: 0.9, 0.88, 1.11, 0.94, 0.92, 1.09, 1.1, 3.05 (ignored), 1.14, 0.61, 1.15)
(9) Past Growth (stated)
QtrTTM CAGR-Growth 1yr. 3yr. 5yr. 10yr
1.49%. REV. 0.29 1.67. 3.50. 1.00%
-6.72%. NI. 7.36. 2.71. 4.16. 8.54%
-5.32%. EPS. 8.14%. 3.86. 5.59. 10.31%
(10) Past Growth (manually calculated based on normalised EPS)
TTM -> 6.78 \*\* (slight difference from (2) above.
2025 June-> 7.07, 6.52, 5.89, 5.78, 5.66, 5.12, 4.53 (2019 June) , 4.22, 3.92, 3.67 <- June 2016)
a. precovid based on 2016 to 2019 june, cagr is around 7.3%
b. last 10 years cagr is between 6.3% to 7.6% depending on inclusion of lower TTM nos.
(11) Management guidance
Fy26 ( this FY in June 2026): 4% sales growth epxected and EPS is inline + 4% yoy. EPS will be around $6.83 to $7.09 (mid point : 6.96)
(12) Forward growth etimates + eps guidance from wall street
a. SA
Stated: Growth: 5%
2026 June EPS->6.97, 7.32, 7.76, 8.04, 8.47, 8.64, 9.17, 9.69, 10.33, 11.01<- 2035 June CAGR: 5.2%
b. Zacks 3 year growth forecast: 4.24%
c. Discounting cash flow dot com:
2026 June EPS->6.96, 7.34, 7.77, 7.96, 8.61 Growth: 5.5%
d. eulerpool dot com
2026 June EPS->7.18, 7.56, 7.98, 8.29, 8.73, 8.9. Growth: 4.4%
(13) My fairprice calculation
for the starting point, i will use june 2026 estimates of 6.97 instead of june 2025 actuals, because june 2026 EPS is lower than 2025, so we err on the conservative side. (Since it is in the middel of the FY, q2 has just passed afterall, we could also use the TTM EPS as the starting point, which in this case is 6.78)
I will create 3 scenarios:
PG will growth in line with the long term growth rate of 3%
PG will growth at slightly slower than what analysts are expecting at 4%
PG will growth at 5%
||3%|4%|5%|
|:-|:-|:-|:-|
|Multiplier |17.1|18.52|20|
|Fairvalue (EPS=6.97)|119|129|139|
My fair value calculation put PG worth around 120 to 140
(14) Morningstar Fair value for PG is around $148 (price is currently at fairvalue)
Other Notes:
1. The multiplier calculator was posted previously, here is the original post
https://www.reddit.com/r/ValueInvesting/comments/1owp0j0/here_is_a_beginners_npv_calculator_for_find_out/
2. the right page of the original paper valuation has been torn out and was redone, instead of 6.97 2026 eps i used 9.67 and got a beautiful but wrong fair value.