Procter & Gamble (PG): fair value

Fair-value band

The normal range for this name runs from $137 (cheap) to $177 (expensive); it is now priced at $158.

That is 0.0σ above this name's own normal premium.

Is Procter & Gamble undervalued?

Fair, relative to its own history. Procter & Gamble trades at $158, 4% above the fair value this model estimates, but it has habitually traded 4% above fair value, and today's gap is 0.0σ above that norm, within the range it normally trades in, so the verdict is Fair: priced normally for itself, not necessarily fairly valued.

Diligence checklist

8 pass · 2 fail · 1 no data

• PASSCash actually collected from profit, last 12 months: 121%XBRL · Procter & Gamble gets $1.21 of real cash for every $1 of reported profit which means profits are real and not just numbers on paper. That's a good sign.
• PASSGap between paper profit and real cash: -2.8%XBRL · Procter & Gamble's "profit on paper" and "cash in the bank" gap is small enough to pass.
• PASSDebt compared to one year of cash earnings: 1.20xXBRL · It would take 1.20 years of earnings to clear what Procter & Gamble owes, net of the cash it holds. My limit for a name I would buy is three years, so this passes, though the balance sheet is doing more of the work than it does at the top of this list.
• PASSHow much more it earns on capital than that capital costs: +11.16ppXBRL · Procter & Gamble earns 11.2 points more on the capital it employs than that capital costs. The gap is real but not wide, so growth here creates value at a modest rate rather than compounding it. The gap is wider than it was at the start of the window.
• FAILStock sold by executives and directors on the open market, last 6 months: $7.5MEDGAR (dealbreaker) · Whaley Susan Street sold $1.9M of stock in the last 6 months, outside any pre-planned selling schedule, and $7.5M went out that way in total. My rulebook says more than $5 million of this kind of selling is disqualifying for a "long" position (buying the stock). The full list of open-market sellers: Whaley Susan Street $1.9M, Schulten Andre $1.3M, Jejurikar Shailesh $0.9M. 1 amended filing is left out so nothing is counted twice. Options being exercised, and shares held back to cover the tax on them, are not sales and I don't count them either. filing ↗
• FAILHow long the CEO has run this company: 0.8 yearsTEXT · Procter & Gamble's chief executive took the job on January 1, 2026, 0.8 years ago. I want a full cycle at the company, which I take as 5 years, before a management record tells me anything: a short run has not yet been tested by a bad year. filing ↗
• PASSProfit margin held up during the last sales slump: 49.8% vs 46.7% baseXBRL · The last time Procter & Gamble's revenue fell, its profit margin per unit sold only slipped a little, from about 46.7% to 49.8%. It means Procter & Gamble isn't being forced to cut prices to keep product moving, which is what a company with a weak competitive position has to do. This is the accounts talking, not the filing: I'm reading the 9 quarters from December 2014 to December 2016, measured against the year going into it, and a shift in what the company sold can imitate pricing power either way.
• PASSNormal profit margin across a full business cycle: FCF margin 18.2% vs 18.3% medianXBRL · Procter & Gamble's current cash margin (18.2%) sits a little below its long-run average (18.3%). My valuation grows the average, so a soft patch doesn't get written into the value as if it were permanent. Across the window the margin ran between 14.9% in December 2022 and 20.5% in June 2024.
• N/AHow much of the stock trades on an average day: $1,210MMARKET · Procter & Gamble trades so much volume that this basically isn't a concern. There's no pass or fail here because the answer depends on how big a position I'd actually want to take.
• PASSShare of revenue from its single biggest customer: no customer 10%+ of revenue disclosedTEXT · Procter & Gamble's August 4, 2026 10-K doesn't disclose any customer at 10% or more of revenue. The accounting rules require that disclosure only when it applies, so its absence means no single customer clears that bar, which is well inside the quarter of revenue where I stop work. This comes from the filing's prose rather than a tagged number: the percentages sit in an XBRL field the SEC's bulk data drops. filing ↗
• PASSWhether the company switched auditors in the last 2 years: noneEDGAR · Companies sometimes switch accounting auditors right before something bad is uncovered which can be a warning sign. Procter & Gamble hasn't changed auditors in the last 2 years, so there's no such red flag here.