Is Procter & Gamble’s Share Price Slide Creating a Long Term Opportunity in 2025?

• If you are wondering whether Procter & Gamble is finally trading at a price that makes long term sense for a quality defensive stock, this article will walk you through whether the current dip is an opportunity or a value trap.
• The share price has slid to around $138.34, with returns of -6.2% over the last week, -5.9% over the last month, and -16.9% over the past year, while the 5 year return remains a positive 15.4%.
• Recently, investors have been digesting a mix of macro headwinds, including stubborn inflation and shifting consumer spending patterns that weigh on staples, along with ongoing debates about pricing power for brands like Tide, Pampers, and Gillette. At the same time, commentary around cost cutting, portfolio simplification, and disciplined marketing spend has kept sentiment from turning outright negative.
• Despite that pressure, Procter & Gamble currently scores a solid 5/6 valuation checks, suggesting it screens as undervalued on most of the key metrics tracked. Next, this article will unpack what different valuation approaches indicate about PG, and then conclude with a more holistic way to think about its fair value that goes beyond the usual multiples and models.

Procter & Gamble delivered -16.9% returns over the last year. See how this stacks up to the rest of the Household Products industry.

Approach 1: Procter & Gamble Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a business is worth today by projecting the cash it can generate in the future and discounting those cash flows back to the present. For Procter & Gamble, the model used is a 2 stage Free Cash Flow to Equity approach, based on cash flows reported and forecast in $.

Over the last twelve months, Procter & Gamble generated about $15.4 billion in free cash flow. Analyst forecasts and Simply Wall St extrapolations see this rising gradually, with free cash flow projected to reach roughly $21.4 billion by 2035, implying steady low single digit annual growth as the company matures.

When these future cash flows are discounted back, the DCF model suggests an intrinsic value of about $185.05 per share, compared with the recent share price around $138.34. That implies the stock is trading at roughly a 25.2% discount to its estimated fair value, indicating that the market is pricing in a more pessimistic outlook than the cash flow projections assume.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Procter & Gamble is undervalued by 25.2%. Track this in your watchlist or portfolio, or discover 909 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Procter & Gamble.

Approach 2: Procter & Gamble Price vs Earnings

For a mature, consistently profitable business like Procter & Gamble, the price to earnings (PE) ratio is a useful way to gauge how much investors are willing to pay for each dollar of current profits. In general, companies with stronger, more reliable growth and lower perceived risk can justify a higher PE, while slower growing or riskier companies tend to trade on lower multiples.

Procter & Gamble currently trades on a PE of about 19.6x, roughly in line with the peer average of 19.7x and modestly above the broader Household Products industry at around 17.1x, which reflects its stronger brand portfolio and resilience. Simply Wall St also calculates a proprietary Fair Ratio of 22.0x for Procter & Gamble, which is the PE you might expect given its earnings growth outlook, margins, industry, market cap, and risk profile. This Fair Ratio can be more insightful than a simple peer or industry comparison because it adjusts for the company’s specific strengths and risk factors rather than assuming all consumer staples are alike.

With the current PE of 19.6x sitting below the Fair Ratio of 22.0x, the multiple based view points to the shares being modestly undervalued.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your Procter & Gamble Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a simple framework on Simply Wall St’s Community page that lets you attach a story to your numbers by connecting your assumptions about Procter & Gamble’s future revenue, earnings and margins to a financial forecast, a fair value, and finally a clear buy or sell view based on whether that Fair Value sits above or below today’s share price. All of this then updates automatically as fresh news or earnings arrive. For example, an investor who sees PG as a slow growing, inflation like compounder with modest margin pressure might arrive at a fair value closer to about $120. Another investor who expects steady innovation, margin expansion and a premium multiple could justify something nearer $186. This illustrates how different but clearly defined perspectives on the same company can lead to very different, yet transparent and testable, investment decisions.

For Procter & Gamble however we'll make it really easy for you with previews of two leading Procter & Gamble Narratives:

🐂 Procter & Gamble Bull Case

Fair value: $169.05

Implied undervaluation vs last close: 18.2%

Forecast annual revenue growth: 3.19%

• Analysts expect modest but steady growth in revenue and margins, with net margin rising toward about 19.6% and earnings reaching roughly $17.8 billion by 2028.
• Shareholder returns are described as being supported by consistent dividends and ongoing share repurchases, which together are expected to lift earnings per share over time.
• The consensus price target of about $169 is presented as implying PG is close to fairly valued at current levels, assuming execution on innovation, productivity gains, and disciplined capital returns.

🐻 Procter & Gamble Bear Case

Fair value: $119.81

Implied overvaluation vs last close: 15.5%

Forecast annual revenue growth: 4.68%

• PG is treated in this view as a mature compounder with revenue, free cash flow, and dividends growing roughly in line with inflation, implying only low single digit long term growth.
• Margins are expected in this scenario to drift slightly lower toward the low 20% range as competitive pressure builds, even though returns on invested capital remain strong.
• A blend of DCF, dividend discount, and historical multiple analysis in this framework points to a fair value near $120, suggesting the current share price implies limited upside unless growth or margin expansion beats expectations.

Do you think there's more to the story for Procter & Gamble? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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