The Procter & Gamble Company provides branded consumer packaged goods to consumers in North America, Europe, the Asia Pacific, India, the Middle East, Africa, and Latin America. More info.
The calculations below outline how an intrinsic value for Procter & Gamble is arrived at by discounting future cash flows to their present value. We use analyst's estimates of cash flows going forward 5 years.
See our documentation to learn about this calculation.
|Levered FCF (USD, Millions)||$10,429.49||$11,214.13||$11,592.08||$11,971.00||$11,175.95|
|Source||Analyst x7||Analyst x9||Analyst x5||Analyst x1||Extrapolated @ (-6.64%)|
Discounted (@ 8.5%)
Present value of next 5 years cash flows:
Terminal Value = FCF2021 × (1 + g) ÷ (Discount Rate – g)
Terminal Value = $11,176 × (1 + 2.3%) ÷ (8.47% – 2.3%)
Terminal value based on the Perpetuity Method where growth (g) = 2.3%:
Present value of terminal value:
Equity Value (Total value) = Present value of next 5 years cash flows + terminal value
Value = Total value / Shares Outstanding ($168,471 / 2,558)
Value per share:
Current discount (share price of $87.25): -32%
The discount rate, or required rate of return, is estimated by calculating the Cost of Equity.
Discount rate = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
Discount rate = 8.47% = 2.33% + (0.8 * 7.67%)
The Levered Beta is the Unlevered Beta adjusted for financial leverage. It is limited to 0.8 to 2.0 (practical range for a stable firm).
Levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
0.438 = 0.4 (1 + (1- 30%) (13.63%))
Levered Beta used in calculation = 0.8
Are Procter & Gamble's annual earnings growth expected to exceed 3.4% over the next 3 years?
Mr. David S. Taylor has been the Chairman of the Board of The Procter & Gamble Company since July 1, 2016 and has been its Chief Executive Officer and President since November 1, 2015. Mr. Taylor served as Group President of Global Beauty, Grooming and Health Care at Procter & Gamble Co. until November 1, 2015. He served as Head of Over Health and Grooming at Procter & Gamble Co. since July 1, 2013. He served as the Group President of Global Home Care at The Procter & Gamble Company from 2007 to June 30, 2013 and served as its Group President of Global Health and Grooming since July 01, 2013 to July 2015. Mr. Taylor served as Group President of Global Home Care at Procter & Gamble Co. since 2007. He was responsible for P&G's Professional Business unit, which sells directly to large hotels, restaurants, airports, care homes, industrial facilities and retail chains. He served as vice-president - North America family care at The Procter & Gamble Company since 2003 until July 01, 2005. Mr. Taylor has been with P&G since 1980 in various roles. He served as President of Global Family Care of Procter & Gamble Co. from July 1, 2005 to 2007. He also served as Vice President of North America Family Care at Procter & Gamble Co. from 2003 to July 1, 2005. He has 25 years of experience, including more than five years outside the USA and assignments in Baby, Beauty and Family Care. His previous positions include: served as Production Manager at Greenville, NC since 1980; Department Manager at Greenville, NC since 1983; Operations Manager at Cheboygan, MI since 1985; Operations Manager at Albany, GA since 1986; Plant Manager at Mehoopany, PA since 1989; Assistant Brand Manager at Pampers, U.S. (Cincinnati) since 1992; Brand Manager at Pampers, U.S., (Cincinnati) since 1993; Marketing Director at Diaper Products, US, (Cincinnati) since 1996; General Manager of Hong Kong & China Hair Care, (Hong Kong/China) since 1998; General Manager at Greater China Hair Care and Tissues & Towel, (China) since 2000 and General Manager and Vice President of Greater China Hair Care & Anti-Counterfeiting (China) and Vice President-Western Europe Family Care since 2001. His Local And National Activities include: Since 2006, has been on Church of the Savior Methodist Church's Endowment Board. He served as an Independent Director of TRWAutomotive Holdings Corp. since November 17, 2010 until May 15, 2015. He serves as a Director at The Procter & Gamble Company. He has been Board of Directors at America's Second Harvest and since 2007, he has been Cincinnati Scholarship Foundation's Board of Trustees. From 1989 to 1991, he served as Board Member at Regional Development Commission - Mehoopany, PA; From 1992 to 1998 at Anderson Hills United Methodist Church; from 1998 to 2001 at Church of All Nations; From 1998 to 2001, Mr. Taylor served as Board Member at HKANA - Retail Association; From 2000 to 2001, he served as Vice Chairman at Quality Brand Protection Committee - China. He served as a Director of TRW Automotive Inc. Since 2006 until May 15, 2015. Mr. Taylor holds a BS in Electrical Engineering from Duke University in 1980.
Average tenure of the Procter & Gamble management team:
Average tenure of the Procter & Gamble board of directors:
The Procter & Gamble Company provides branded consumer packaged goods to consumers in North America, Europe, the Asia Pacific, India, the Middle East, Africa, and Latin America. The company’s Beauty segment offers hair care products comprising conditioners, shampoos, styling aids, and treatments; and antiperspirants and deodorants, personal cleansing, and skin care products. This segment markets its products under the Head & Shoulders, Olay, Pantene, Rejoice, Old Spice, Safeguard, and SK-II brands. Its Grooming segment provides blades and razors, pre- and post-shave products, and other shave care products, as well as appliances under the Braun, Fusion, Gillette, Mach3, Prestobarba, and Venus brands. The company’s Health Care segment offers toothbrushes, toothpaste, and other oral care products; and gastrointestinal, rapid diagnostics, respiratory, vitamins/minerals/supplements, and other healthcare products under the Oral-B, Crest, Prilosec, Vicks, Metamucil, Pepto Bismol, and Align brands. Its Fabric & Home Care segment provides fabric care products, including fabric enhancers, laundry additives, and laundry detergents; and home care products comprising air care, dish care, P&G professional, and surface care products under the Tide, Ariel, Downy, Gain, Cascade, Dawn, Febreze, Mr. Clean, and Swiffer brands. The company’s Baby, Feminine & Family Care segment offers baby care products, such as baby wipes, diapers, and pants; adult incontinence and feminine care products; and family care products, such as paper towels, tissues, and toilet papers. This segment markets its products under the Pampers, Always, Bounty, Charmin, Luvs, and Tampax brands. The company sells its products through mass merchandisers, grocery stores, membership club stores, drug stores, department stores, distributors, baby stores, specialty beauty stores, e-commerce, high-frequency stores, and pharmacies. The Procter & Gamble Company was founded in 1837 and is based in Cincinnati, Ohio.
|Name:||The Procter & Gamble Company|
|Market Cap:||$223,152 million|
One Procter & Gamble Plaza, Cincinnati, 45202, United States
|Sector:||Household and Personal Products|