QS Research · Michael Burry's Scion Capital analyst template · 2006
PROCTER & GAMBLE Co (PG)
As of 2026-11-06 · 11/15 boxes filled from SEC filings and market data
Conclusion: PASS
Conviction low · base case 0% · downside -16% · upside +14%
At $165.88 (N1), PG trades at 17.7x TTM EBITDA (N25); I use that as the base, so base-case value is today's price, 0%. Downside: 15x on $23.04B TTM EBITDA (N13) = $345.6B EV, less $24.44B net debt ($38.92B debt + $887M leases - $15.37B cash; N21,N22,N20) = $321.2B equity / 2,317.78M shares (N5) = ~$138.6, -16%. Upside: 20x = $460.8B EV, less $24.44B = $436.4B / 2,317.78M = ~$188.3, +13.5%. The market is not missing a bargain: 4.64x EV/Sales is the top of the staple set (N24), FY2026 operating income fell to $19.75B from $20.45B (S2), so the EBITDA discount is a margin story, not cheapness; pass.
Key numbers
- Share price: $165.88
- Market cap: $384.47B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $87.92B
- EV / EBITDA (TTM): 17.7x
- P/E (TTM): 24.4x
The 15 boxes
- ✓ 1. Long-form business notes
P&G (incorporated in Ohio in 1905, roots in Cincinnati 1837) sells branded daily-use consumer products in about 180 countries through retail, digital commerce and direct-to-consumer, and operates in roughly 65 countries with about 104,000 employees as of 2026-06-30. The FY2021-FY2026 window shows steady top-line growth (revenue $76.12B to $87.03B) with operating income up from $17.99B to $19.75B but down from FY2025's $20.45B even as revenue rose $84.28B to $87.03B, i.e. margin compression in FY2026. Cash generation stayed large (operating cash flow $19.56B in FY2026) while capex climbed to $4.41B and buybacks shrank to $5.03B from $11.01B in FY2021. The main structural changes versus the oldest filing are higher customer concentration (Walmart ~16% of sales vs ~15% in FY2021; top ten 43% vs 39%), expressly tariff-exposed input costs, a smaller workforce after restructuring, and a channel mix that now names digital/social commerce and direct-to-consumer.
- ○ 2. Competitive advantage
The sources show a large branded global consumer-products company: operations in about 65 countries, sales in about 180 countries and territories, more than 50% of annual net sales outside the U.S., and worldwide-recognized brands. Revenue rose from $76.12B in FY2021 to $87.03B in FY2026 and operating income stayed positive every year, peaking at $20.45B in FY2025. That supports a brand/scale advantage, but the 10-K stresses intense competition, hard-discounter and private-label pressure, retail concentration, and cost volatility; the data give no market-share, margin, or return ratios.
- ✓ 3. 10-Q takeaways
For the three months ended 2026-09-30, net sales rose 4.0% to $23.3B and organic sales rose 4.0%, but gross margin fell 160 bp to 49.8% and operating margin fell 70 bp to 25.5%; operating income was $5.9B (+1%), net earnings $4.8B (-1%), diluted EPS $1.97 (+1%) and Core EPS $2.00 (+1%). Operating cash flow was $5.8B and free cash flow $4.4B (93% productivity), with inventory a $349M cash use on higher safety stock. The 10-Q disclosed a $2.0B restructuring plan and the $3.9B all-cash Thorne acquisition completed 2026-10-01, but gave no explicit forward sales/EPS guidance and no updated risk factors.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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