# Procter & Gamble (PG)

Sector: Consumer packaged goods

| Field | Value |
|---|---|
| Price | $151.23 |
| Fair value (Analysts) | $155.00 |
| Discount to fair value | 2.4% |
| Fair value uncertainty (Analysts) | Low |
| Economic moat (Analysts) | Wide |
| LSEG analyst rating (1 strong buy to 5 strong sell) | 2.54 |
| Data as of | 2026-10-12 |
| Next earnings | 2026-10-22 (confirmed) |

## In short

Investors see sales growth that comes only from price, and unit volume that grows again while one-time costs end can close the gap over the next two to four quarters.

## Themes and gap

- Themes: Weak consumer (weak-consumer), Tariffs and trade (trade-tariffs)
- Gap type: Can close (closable)
- Why: The restructuring ends in mid-2027, and each quarter shows whether unit volume grows again.

## About

Procter & Gamble makes household and personal care products. Its brands include Tide, Pampers, Gillette, and Crest. Retailers around the world sell these products to consumers every day. The company earns money through steady, repeat purchases of everyday items.

## Thesis

Investors see a company that sells no more units than a year ago. In fiscal 2026, all of the 1% organic sales growth came from higher prices, and volume was flat. Weak consumer demand and heavy promotions make further price increases difficult. Higher costs for commodities, energy and transport also cut fiscal 2027 earnings, and P&G expects first-quarter core EPS to fall 5% or more. The company is cutting about 7,000 jobs and dropping weak brands, and these one-time costs hide part of its earnings power. For the gap to close, unit volume must grow again without new price cuts that reduce the margin. The restructuring costs must also end inside the plan, and core EPS must stay in the $6.89 to $7.11 range for fiscal 2027. The Thorne supplements purchase must also add growth without a large cost. The first test comes at fiscal first-quarter earnings on October 22, 2026, and the restructuring plan ends in mid-2027. If volume recovers over the next two to four quarters, the gap can close. If volume stays flat and costs stay high, the discount can last into 2027.

## Checkpoints

- Oct 22, 2026: Fiscal Q1 2027 earnings: volume, costs and guidance. Status: Pending. Watch: Flat or positive organic volume, a core EPS decline no worse than the 5% or more that P&G guided, and an unchanged $6.89 to $7.11 fiscal 2027 range pass; a guidance cut or a volume decline fails.
- Dec 2026 (estimate): Thorne purchase closes. Status: Pending. Watch: The $3.8 billion purchase closes between October and December 2026 with no large change to the terms passes; a block by regulators or a long delay fails.
- Jan 2027 (estimate): Fiscal Q2 2027 earnings: holiday-quarter volume and guidance. Status: Pending. Watch: Organic sales growth inside the 1% to 3% guidance with volume holding up passes; a guidance cut or a new fall in volume fails.
- Jul 2027 (estimate): Fiscal 2027 results: restructuring plan ends. Status: Pending. Watch: Restructuring charges that stop inside the $1.0 to $1.6 billion plan and a higher core operating margin pass; new charges or a longer plan fail.

## Balance sheet

- Cash: $9.9B
- Debt: $34.1B
- Net debt: $24.2B
- EBITDA, last 12 months: $22.9B
- Net debt / EBITDA: 1.1× (low)
- Interest cover: 22×
- Undrawn credit line: $8.0B
- Debt due within 12 months: $11.3B
- Ratings: Moody's Aa3 (stable outlook), S&P AA- (stable outlook)

Procter & Gamble funds itself with cash from operations and with unsecured debt that the parent company issues. The strong rating keeps borrowing easy, and dividends and buybacks use about all of the cash it makes. At June 30, 2026, the debt due within one year included $6.5 billion of long-term debt that becomes due and $4.8 billion of commercial paper. Long-term debt was $22.8 billion, at a weighted average rate of 3.3% after interest rate swaps. EBITDA is fiscal 2026 operating income plus depreciation and amortization. The undrawn bank facilities support the commercial paper program: $3.2 billion until October 2030 and $4.8 billion for 364 days until October 2026. Current liabilities were $12.5 billion more than current assets. This is normal for P&G, because it pays maturing short-term debt with new commercial paper. In fiscal 2026, P&G paid $10.2 billion in dividends and spent $5.0 billion on buybacks. This used about all of its $15.8 billion adjusted free cash flow. The fiscal 2027 plan is about $10 billion in dividends and $5 billion in buybacks, slightly more than the cash it expects to make. P&G will also pay $3.8 billion in cash for Thorne, with closing expected between October and December 2026. If debt pays for all of it, gross debt increases to about $38 billion.

As of 2026-06-30.

Sources:

- https://www.sec.gov/Archives/edgar/data/80424/000008042426000103/pg-20260630.htm
- https://www.sec.gov/Archives/edgar/data/80424/000008042426000093/fy2526q4amj8-kexhibit991.htm

## Recent events

- 2026-09-24: P&G confirmed that it will discuss its fiscal first-quarter 2027 results on October 22, 2026.
- 2026-08-04: P&G agreed to buy Thorne, a maker of premium vitamins and supplements, for $3.8 billion in cash. Thorne will join the Health Care segment. P&G expects the purchase to close between October and December 2026, after regulatory approvals.
- 2026-07-29: P&G reported fiscal 2026 results. Net sales were $87.0 billion, organic sales grew 1%, and core EPS was $6.89. All of the organic growth came from price, and volume was flat. For fiscal 2027, P&G guided organic sales growth of 1% to 3% and core EPS of $6.89 to $7.11, and it expects first-quarter core EPS to fall 5% or more.
- 2026-07-29: P&G's board named CEO Shailesh Jejurikar as Chairman, effective August 1, 2026. He succeeds Jon Moeller, who retired from the board on July 31, 2026, and from the company on August 14, 2026.
- 2026-04-14: P&G raised its quarterly dividend by 3% to $1.0885 per share. This is its 70th annual dividend increase in a row.
- 2025-06-05: P&G announced a two-year restructuring plan to cut about 7,000 non-manufacturing jobs, about 6% of its total workforce, and to exit some brands and categories.

## Risks

- High: In fiscal 2026, all of the organic sales growth came from price, and volume was flat. Consumer demand is weak and promotions are heavy. If P&G must cut prices to sell more units, its margin falls.
- Medium: Fiscal 2027 guidance includes about $0.56 per share of cost headwinds: about $1 billion after tax from commodities, energy and transport, and smaller amounts from interest, non-operating income and currency. If these costs increase more, core EPS can fall below the guidance range.
- Medium: P&G is in the middle of a two-year restructuring plan to cut about 7,000 jobs and exit weaker brands. The plan costs $1.0 to $1.6 billion before tax over fiscal 2026 and 2027, and more than half came in fiscal 2026. New charges or a longer plan would cut earnings again.
- Low: Tariff changes are a risk outside the fiscal 2027 guidance. The $3.8 billion Thorne purchase can also fail to give the growth that P&G expects.

## Links

- Page: https://picks.kamadorueda.com/company/PG/
- History of changes: https://picks.kamadorueda.com/company/PG/history/
- JSON with full history: https://picks.kamadorueda.com/data/company/PG.json

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