Value
4.8/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 5.9 |
| P/S | 7.6 |
| EV/EBITDA | 3.0 |
| Fwd P/E | 6.1 |
| PEG | 3.0 |
| Analyst target | 4.0 |
- ▸Forward P/E: 21.1x
- ▸PEG: 4.21
PG · Why this verdict
Why Procter & Gamble Company (The) (PG) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score5.7/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Procter & Gamble has beaten earnings estimates in all 4 recent quarters, generates a 31% ROE with a wide economic moat, and exhibits strong momentum with rising on-balance volume, but the stock is priced above analyst targets with -2.2% upside and carries significant geographic and supplier concentration risks.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Procter & Gamble generates a 31% return on equity with 19% operating margins and ranks in the top decile of consumer staple peers on both ROE and margin quality, demonstrating durable pricing power across its household brands. Quality breakdown | ROE remains above 28% and operating margins stay above 17% over the next 4 reported quarters. | →Stable |
| CounterA 31% ROE is substantially driven by financial leverage; stripping out debt effects, the underlying return on assets is more modest, and margin pressure from commodity input costs could compress results faster than expected. | ||
Procter & Gamble has beaten EPS estimates in all 4 most recent quarters with an average upside surprise of 3.1%, combined with a wide economic moat score of 7.6 and a Piotroski F-Score of 8/9, marking it as a high-quality compounder. Catalyst breakdown | EPS beats continue in all 4 of the next 4 quarters with average positive surprise above 2% and the moat score stays above 7.0. | →Stable |
| CounterSmall but consistent earnings beats in large-cap consumer staples often reflect conservative guidance practices rather than genuine outperformance; the 3.1% average is modest and could be disrupted by a single quarter of volume weakness. | ||
Procter & Gamble has high-priority concentration risks in non-US operations and single-source suppliers for key inputs, creating two structural vulnerabilities to geopolitical disruption and supply chain shocks. Bear case | Neither concentration risk results in material revenue or margin impact of more than 3% in any single reported quarter. | ↓Deteriorating |
| CounterPG's global footprint spanning 180+ countries is among the most diversified in consumer staples; geographic concentration is relative and the company has decades of experience managing FX and geopolitical risks. | ||
The stock is priced above the analyst resistance target of $148.47 at $150.46, offering -2.2% implied upside while the 7.7% downside to the stop-loss creates an unfavorable risk/reward profile at current entry levels. Warnings | Analyst targets are revised upward above $165 within 12 months as the earnings beat streak continues and volume trends normalize. | ↓Deteriorating |
| CounterLarge-cap consumer staple stocks regularly trade above analyst targets due to their defensive premium; institutional demand and index weighting can sustain above-target prices for extended periods. | ||
Procter & Gamble generates a 31% return on equity with 19% operating margins and ranks in the top decile of consumer staple peers on both ROE and margin quality, demonstrating durable pricing power across its household brands.
→StableQuality breakdown
- Expectation
- ROE remains above 28% and operating margins stay above 17% over the next 4 reported quarters.
CounterA 31% ROE is substantially driven by financial leverage; stripping out debt effects, the underlying return on assets is more modest, and margin pressure from commodity input costs could compress results faster than expected.
Procter & Gamble has beaten EPS estimates in all 4 most recent quarters with an average upside surprise of 3.1%, combined with a wide economic moat score of 7.6 and a Piotroski F-Score of 8/9, marking it as a high-quality compounder.
→StableCatalyst breakdown
- Expectation
- EPS beats continue in all 4 of the next 4 quarters with average positive surprise above 2% and the moat score stays above 7.0.
CounterSmall but consistent earnings beats in large-cap consumer staples often reflect conservative guidance practices rather than genuine outperformance; the 3.1% average is modest and could be disrupted by a single quarter of volume weakness.
Procter & Gamble has high-priority concentration risks in non-US operations and single-source suppliers for key inputs, creating two structural vulnerabilities to geopolitical disruption and supply chain shocks.
↓DeterioratingBear case
- Expectation
- Neither concentration risk results in material revenue or margin impact of more than 3% in any single reported quarter.
CounterPG's global footprint spanning 180+ countries is among the most diversified in consumer staples; geographic concentration is relative and the company has decades of experience managing FX and geopolitical risks.
The stock is priced above the analyst resistance target of $148.47 at $150.46, offering -2.2% implied upside while the 7.7% downside to the stop-loss creates an unfavorable risk/reward profile at current entry levels.
↓DeterioratingWarnings
- Expectation
- Analyst targets are revised upward above $165 within 12 months as the earnings beat streak continues and volume trends normalize.
CounterLarge-cap consumer staple stocks regularly trade above analyst targets due to their defensive premium; institutional demand and index weighting can sustain above-target prices for extended periods.
Per-dimension breakdown
Quality
7.5/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 7.3 |
| Gross margin | 6.2 |
| Op margin | 9.2 |
| Net margin | 9.6 |
| Current ratio | 2.9 |
| FCF quality | 5.8 |
| Moat | 7.6 |
| Piotroski F | 8.9 |
- ▸Excellent ROE: 31%
- ▸Strong margins: 19%
- ▸Earnings quality warning: 77% FCF/NI
- ▸Wide economic moat
Growth
3.8/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.3 |
| EPS growth | 3.2 |
Momentum
2.3/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 0.1 |
| OBV | 1.0 |
| MA position | 5.0 |
| Volume | 0.0 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-MA but MA slope flat
Sentiment
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.2 |
| Analyst rating | 7.5 |
| Price target | 6.6 |
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
- ▸Institutions accumulating
Peer rank
6.5/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 2.6 |
| quality rank | 9.1 |
| growth rank | 7.6 |
- ▸Superior ROE vs peers
- ▸Best-in-class margins
Technical
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 7.2 |
| support resistance | 7.0 |
| 52w position | 7.7 |
Risk (lower is worse)
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.5 |
| days to cover | 8.3 |
| volatility | 6.9 |
| put call | 3.4 |
| implied vol | 6.4 |
| max pain risk | 3.0 |
| beta | 10.0 |
| debt equity | 6.9 |
| news risk | 5.0 |
- ▸Above max pain $85
- ▸Concentration risks: 2 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 4.1 |
| dividend safety | 6.0 |
| news activity | 8.0 |
- ▸Perfect beat streak: 4Q
- ▸Earnings in 8 days
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (5)
- INSIDER:OK
- 8K:CLEAN
- NEWS_BOOST:ANALYST:0.40
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (3)
- MOMENTUM:2.3<4.5
- ASYMMETRY:-0.0=NEGATIVE
- DEATH_CROSS:HARD_BLOCK
Warning (1)
- EARNINGS_PROXIMITY:8d<=14d (soft)
Reward-to-Risk
-0.03
Upside
-0.1%
Downside
5.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeTemporary headwind — High quality (7.5) with weak momentum (2.3)
SuitabilityConservative — Beta 0.38<0.8, Div 2.9%, Q=7.5
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: INSIDER:OK. Top dim: Quality at 7.5; weakest: Momentum at 2.3. No conviction either direction.
The strongest dimensions are Quality at 7.5, Insider at 7.3, and Technical at 7.3; the weakest are Momentum at 2.3, Growth at 3.8, and Value at 4.8. The V9 engine flagged 3 failed gates with 1 warning, producing an asymmetric reward-to-risk of -0.03 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Perfect Beat Streak Wide Moat
Trip ifEPS falls below $1.45 per quarter for 2 consecutive quarters, declining more than 8% below the current $1.59-$1.99 recent delivery range.
- P2Roe Quality Compounding
Trip ifOperating margin falls below 15% for 2 consecutive reported quarters, indicating a decline of more than 4 percentage points from current levels.
- P3Geographic Supplier Concentration
Trip ifA geopolitical event or supply chain disruption causes disclosed revenue impact exceeding 3% in any single reported quarter.
- P4Price Above Target No Upside
Trip ifAnalyst consensus price target falls below $138, reducing implied forward upside to less than 0% and signaling a fundamental re-rating downward.