Procter & Gamble Stock Overvalued According to DCF Analysis

On October 05, 2026, GuruFocus published a detailed DCF analysis for Procter & Gamble Co (PG), highlighting a notable discrepancy between its intrinsic value and current market price. The company's stock has seen mixed performance, with a 3.4% year-to-date increase but a 1.9% decline over the past year. The current price of $144.91 raises questions about its valuation, as different models offer conflicting insights.

The earnings-based DCF model suggests an intrinsic value of $86.16, indicating significant overvaluation with a margin of safety of -68.2%. This model assumes a 7.3% annual growth rate in earnings per share (EPS) over the next ten years, followed by a terminal growth rate of 4%. The discount rate applied is 12%, derived from the risk-free rate and equity risk premium. The free cash flow (FCF) DCF model further supports the overvaluation, with an intrinsic value of $68.19 and a margin of safety of -112.5%.

The GF Value™, a proprietary measure from GuruFocus, presents a contrasting view, valuing PG at $167.83 and suggesting the stock is undervalued by 13.7%. This metric considers historical trading multiples, past business growth, and future performance estimates. Despite the strong GF Score™ of 87/100, the analysis highlights the low predictability rank of 2/5 stars, which may reduce the reliability of the DCF models.

Investors should approach the DCF results with caution due to the mixed signals from guru ownership and insider activity. While 20 gurus currently hold PG stock, insiders have sold a net of $61.8 million over the past 12 months. The analysis underscores the need for careful consideration when interpreting the valuation models for Procter & Gamble Co.