DCF Studio

    PG · NYQ · Consumer Defensive

    The Procter & Gamble Company

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 130.36

    Market price

    USD 163.56

    Implied upside

    -20.3%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2026-06-30

    AdjustedCapital expenditure runs at 4.3% of revenue against depreciation of 3.4%. A perpetuity has to be a steady state, so the forecast tapers capex to maintenance at depreciation plus the reinvestment terminal growth requires (g/ROIC of NOPAT), and the terminal year carries on from there. The bridge is shown under Terminal Value.

    Value Per Share

    Perpetuity growth
    USD 130.36-20.3%
    Exit multiple
    USD 157.66-3.6%
    Market price
    USD 163.56

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn9bn18bnFY27FY28FY29FY30FY31FY32FY33FY34FY35FY36
    Nominal FCFFDiscounted to todayUSD
    LineFY27FY28FY29FY30FY31FY32FY33FY34FY35FY36CAGR
    RevenueUSD 89.7bnUSD 92.5bnUSD 95.3bnUSD 98.2bnUSD 101.0bnUSD 103.9bnUSD 106.7bnUSD 109.5bnUSD 112.4bnUSD 115.2bn+2.8%
    EBITUSD 20.8bnUSD 21.4bnUSD 22.1bnUSD 22.8bnUSD 23.4bnUSD 24.1bnUSD 24.7bnUSD 25.4bnUSD 26.0bnUSD 26.7bn+2.8%
    NOPATUSD 16.6bnUSD 17.1bnUSD 17.6bnUSD 18.1bnUSD 18.7bnUSD 19.2bnUSD 19.7bnUSD 20.2bnUSD 20.8bnUSD 21.3bn+2.8%
    Add depreciation & amortisationUSD 3.1bnUSD 3.2bnUSD 3.3bnUSD 3.4bnUSD 3.5bnUSD 3.6bnUSD 3.7bnUSD 3.8bnUSD 3.9bnUSD 4.0bn+2.8%
    Less capital expenditureUSD -3.9bnUSD -4.2bnUSD -4.5bnUSD -4.8bnUSD -5.1bnUSD -5.4bnUSD -5.8bnUSD -6.1bnUSD -6.5bnUSD -6.8bn+6.5%
    Capex, % of revenue4.3%4.5%4.7%4.9%5.0%5.2%5.4%5.6%5.8%5.9%-
    Less increase in working capitalUSD 65.7mUSD 68.7mUSD 69.1mUSD 69.3mUSD 69.5mUSD 69.6mUSD 69.5mUSD 69.4mUSD 69.1mUSD 68.7m-0.5%
    Free cashflow to firmUSD 15.9bnUSD 16.2bnUSD 16.5bnUSD 16.8bnUSD 17.1bnUSD 17.4bnUSD 17.7bnUSD 18.0bnUSD 18.2bnUSD 18.5bn+1.7%
    Discount factor0.96650.90280.84340.78780.73590.68740.64220.59990.56040.5234-
    Present valueUSD 15.3bnUSD 14.6bnUSD 13.9bnUSD 13.3bnUSD 12.6bnUSD 12.0bnUSD 11.4bnUSD 10.8bnUSD 10.2bnUSD 9.7bn-
    Present Value Of The ForecastUSD 123.8bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.572Reported 0.361, pulled toward 1.0 (Blume)
    Cost of equity7.31%Risk-free + beta x equity risk premium
    Cost of debt5.29%Risk-free + 40bp, the spread for a AAA rating at 22.5x interest cover. Book interest / average debt was lower, at 2.5%.
    Market capitalisationUSD 379.1bn91.5% of capital
    Total debtUSD 35.0bn8.5% of capital, book value as a proxy
    Tax rate20.3%Effective, capped at statutory
    WACC7.05%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 130.36

    64% of EV

    Forecast FCFF, final year
    USD 18.5bn
    Capex at depreciation, working capital in reinvestment
    USD 21.3bn
    Less reinvestment at g/ROIC (13.5% of NOPAT)
    USD -2.9bn
    Capitalised
    USD 18.4bn
    ROIC (reported)
    18.5%
    Terminal value, undiscounted
    USD 414.7bn
    Terminal value, discounted
    USD 217.1bn
    Enterprise value
    USD 340.9bn
    Less net debt
    USD 25.1bn
    Equity value
    USD 315.8bn

    Exit at 17.6x EBITDA

    Value per shareUSD 157.66

    70% of EV

    Terminal value, undiscounted
    USD 541.0bn
    Terminal value, discounted
    USD 283.2bn
    Enterprise value
    USD 407.0bn
    Less net debt
    USD 25.1bn
    Equity value
    USD 381.9bn

    Spread between methods: 19%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    5.05%191.56210.31236.66276.17341.55
    6.05%147.57156.70168.57184.52206.97
    7.05%119.44124.31130.36138.06148.08
    8.05%99.91102.61105.90109.94114.99
    9.05%85.5687.0788.8891.0893.76

    Outlined: this model. Green text: above today's price of 163.56. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year2.0%2.8%5.3%
    EBIT margin24.3%23.2%28.6%
    Discount rate-7.1%6.2%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.