PG changes
Pick any two versions below to diff them.
- Price
- $158.08 → $161.57(+2.2%)
- Next earnings
- Oct 22, 2026 → Jan 22, 2027
- Next earnings is estimate
- No → Yes
- Thesis
- Investors removed: see a company added: doubt that removed: sells no more units than a year ago. added: P&G can grow its profit while its costs rise. In fiscal 2026, all of the 1% organic sales growth came from higher prices, and volume was flat. removed: Weak consumer demand added: In the first quarter of fiscal 2027, organic sales grew 4% and removed: heavy promotions make further price increases difficult. added: volume grew about 2%, but core EPS grew only 1%. Higher costs for commodities, energy and transport removed: also cut removed: fiscal 2027 earnings, added: the gross margin by 1.5 points, and P&G added: now expects removed: first-quarter core EPS to fall 5% or more. added: about $1.4 billion after tax of these costs in fiscal 2027, up from about $1 billion. The company is added: also 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, removed: unit volume must removed: grow again added: keep growing without removed: new price cuts that reduce the margin. added: Productivity savings must offset the higher costs, so that the margin stops falling. The restructuring costs must removed: also end inside the plan, and core EPS must stay in the $6.89 to $7.11 range for fiscal 2027. removed: The Thorne supplements purchase added: Thorne, which P&G bought on October 1, 2026, must removed: also add growth without a large cost. The removed: first added: next test removed: comes at added: is the fiscal removed: first-quarter earnings on October 22, 2026, added: second-quarter report, expected in January 2027, and the restructuring plan ends in mid-2027. If volume added: keeps growing and the margin recovers over the next two to removed: four added: three quarters, the gap can close. If removed: volume stays flat and costs removed: stay high, added: keep rising faster than savings, the discount can last into 2027.
- Risks
- In fiscal 2026, all of the organic sales growth came from price, and volume was flat. added: Volume grew about 2% in the first quarter of fiscal 2027, but one quarter does not show a lasting change. Consumer demand is weak and promotions are heavy. If P&G must cut prices to sell more units, its margin falls. Fiscal 2027 guidance added: now includes about removed: $0.56 added: $0.79 per share of cost removed: headwinds: added: headwinds, up from about removed: $1 added: $0.56 in July 2026: about $1.4 billion after tax from commodities, energy and transport, removed: and smaller amounts added: $300 million from added: higher net interest, added: $150 million from lower non-operating income and added: $50 million from currency. If these costs increase more, core EPS can fall below the guidance range. 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. Tariff changes are a risk outside the fiscal 2027 guidance. The removed: $3.8 added: $3.9 billion Thorne purchase can also fail to give the growth that P&G expects.
- Balance sheet
- Cash: removed: $9.9B added: $15.4B Debt: removed: $34.1B added: $38.9B Net debt: removed: $24.2B added: $23.5B EBITDA, last 12 months: removed: $22.9B added: $23.0B Net debt / EBITDA: removed: 1.1× added: 1.0× (low) Interest cover: 22× Undrawn credit line: $8.0B Debt due within 12 months: removed: $11.3B added: $17.0B Ratings: Moody's Aa3 removed: (stable added: (positive 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 removed: about all added: most of the cash it makes. At removed: June added: September 30, 2026, removed: the debt added: was $38.9 billion, up from $34.1 billion at June 30, 2026, mainly because P&G added commercial paper to pay for Thorne. Debt due within one year removed: included $6.5 added: was $17.0 billion, with $6.6 billion of long-term debt that becomes due and removed: $4.8 billion of commercial removed: paper. added: paper for the rest. Long-term debt was removed: $22.8 added: $21.9 billion. Cash was $15.4 billion, removed: at a weighted average rate of 3.3% added: because P&G paid the $3.9 billion for Thorne on October 1, 2026, the day after removed: interest rate swaps. added: the quarter ended. EBITDA is removed: fiscal 2026 operating income plus depreciation and removed: amortization. added: amortization for the 12 months to September 30, 2026. Interest cover is operating income over interest expense for the same period. The added: 10-K for fiscal 2026 lists $3.2 billion of undrawn bank facilities removed: support the commercial paper program: $3.2 billion until October 2030 and $4.8 billion for 364 days until October 2026. added: They support the commercial paper program. The 10-Q does not say if P&G renewed the 364-day facility. 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 added: the first quarter of fiscal removed: 2026, added: 2027, operating cash flow was $5.8 billion. P&G paid removed: $10.2 added: $2.6 billion removed: in added: of dividends and spent removed: $5.0 added: $1.3 billion on buybacks. removed: This used about all of its $15.8 billion adjusted free cash flow. The fiscal 2027 plan is removed: about added: more than $10 billion removed: in added: of dividends and added: about $5 billion removed: in buybacks, slightly more than the cash it expects to make. added: of buybacks. On October 26, 2026, P&G removed: will also pay $3.8 added: sold $4.0 billion removed: in cash for Thorne, with closing expected between October and December 2026. If debt pays for all of removed: it, gross debt increases added: notes due from 2031 to removed: about $38 billion. added: 2056. The pricing term sheet lists Moody's Aa3 with a positive outlook and S&P AA- with a stable outlook. As of removed: Jun added: Sep 30, 2026.
- Checkpoints
- Oct added: 1, 2026: Thorne purchase closes. Passed. 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. Outcome: P&G completed the purchase on October 1, 2026, for $3.9 billion in cash. Oct 22, 2026: Fiscal Q1 2027 earnings: volume, costs and guidance. removed: Pending. added: Passed. 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. removed: Dec 2026 (estimate): Thorne purchase closes. Pending. Watch: The $3.8 billion purchase closes between October and December 2026 with no large change to added: Outcome: Organic volume grew about 2%, core EPS rose 1% instead of the removed: terms passes; a block by regulators added: guided fall of 5% or removed: a long delay fails. added: more, and P&G kept the $6.89 to $7.11 range. Jan added: 22, 2027 (estimate): Fiscal Q2 2027 earnings: holiday-quarter volume and guidance. 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. 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.
- Recent events
- Oct added: 26, 2026: P&G sold $4.0 billion of US dollar notes due from 2031 to 2056, at rates from 5.125% to 5.900%. On October 27, it started an offer of euro notes of an amount not yet set. Oct 22, 2026: P&G reported fiscal first-quarter 2027 results. Net sales rose 4% to $23.3 billion, and organic sales also rose 4%, with about 2% from volume and 1% from mix. Core EPS rose 1% to $2.00, against the guidance of a fall of 5% or more. Core gross margin fell 1.5 points, mostly because of higher commodity costs and product investments. P&G kept its fiscal 2027 guidance of 1% to 3% organic sales growth and core EPS of $6.89 to $7.11, and raised its all-in sales growth guidance to 2% to 4% because of Thorne. It now expects about $1.4 billion after tax of commodity, energy and transport cost headwinds, up from about $1 billion. Oct 13, 2026: At the annual meeting, shareholders elected all 12 director nominees and voted against three shareholder proposals, per preliminary results. The board declared a quarterly dividend of $1.0885 per share, payable on or after November 16, 2026. added: Oct 1, 2026: P&G completed its purchase of Thorne for $3.9 billion in cash. Thorne is part of the Personal Health Care business. Sep 24, 2026: P&G confirmed that it will discuss its fiscal first-quarter 2027 results on October 22, 2026. Aug 4, 2026: 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. Jul 29, 2026: 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. Jul 29, 2026: 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. Apr 14, 2026: P&G raised its quarterly dividend by 3% to $1.0885 per share. This is its 70th annual dividend increase in a row. Jun 5, 2025: 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.