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General information
The Procter & Gamble Company manufactures and markets consumer products in countries throughout the world. The Company provides products in the laundry and cleaning, paper, beauty care, food and beverage, and health care segments. Procter & Gamble products are sold primarily through mass merchandisers, grocery stores, membership club stores, drug stores, and neighborhood stores.
  • Good financial results growth rate 13.5% (average between last period year over year growth for revenue and EBITDA), there is acceleration compared to average historical growth rates (5.0%)
  • Dividend yield for the last twelve months 2.3%
  • Free cash flow yield 3.8% (LTM)
  • Share price is 94.1% higher than minimum and 4.7% lower than maximum for the last 3 years
  • The company is undervalued by EV / LTM EBITDA multiple compared to target level (18.3x vs 19.1x)
  • Fundamental value created in LTM (estimate) 16.6%
Key Financials
Ticker: PG
Share price, USD: 137.66
Common stocks: 2 493 812 048

Dividend Yield:  2.3%
FCF Yield LTM: 3.8%
EV / LTM EBITDA: 18.3x
Last revenue growth (y/y):  8.5%
Last growth of EBITDA (y/y):  18.4%
Historical revenue growth:  3.6%
Historical growth of EBITDA:  6.4%
Target EV / EBITDA (hist 75% percentile): 19.1x
Express share price potential: 5.9%
Fundamental value created in LTM: 16.6%
EV / LTM EBITDA mutiple calculation
Market Cap ($m): 343 298
Net Debt ($m): 19 545
EV (Enterprise Value): 362 843
EBITDA LTM ($m): 19 846
EV / LTM EBITDA: 18.3x

Revenue and EBITDA

Quarterly values ($m)

Change (y/y)

Cash Flow

Free Cash Flow ($m)

Net Debt / Cash and Equivalents ($m)

Share price and dividends

Share price

Payment USD per share

Multiple and potential

EV / LTM EBITDA and 75% percentile

Potential dynamics

Value Creation

Fundamental Value Creation is calculated as ratio of value created in the last period to current market cap of the company.

The fundamental value can be created in two ways:
• cash generation in form of dividend payments or debt reduction or share buybacks
growth of the company enterprise value through improving financial results

The growth of enterprise value in the last period is estimated as product of:
• annualized increase of EBITDA in the last reporting period year over year
• relevant EV/EBITDA multiple (average between actual EV/EBITDA for the company and average general level of 10.0x is applied)

Parameter
#
Formula
Value
    
    
            EBITDA (pre LTM Q)
(1)
5 027
            EBITDA (last Q)
(2)
5 952
            EBITDA LTM
(3)
19 846
    
    
        EBITDA LTM / last Q
(4)
(3) / (2)
3.334
    Gain of EBITDA (mln $)
(5)
( (2)-(1) ) * (4)
3 084
    
    
            EV
(6)
364 816
        Mult
(7)
(6) / (3)
18.4x
        Mult common
(8)
const
10.0x
    Mult avg
(9)
avgerage
14.2x
    
    
    Equity+
(10)
(5) * (9)
43 769
    FCF LTM
(11)
13 144
    
    
Value+
(12)
(10) + (11)
56 913
Cap
(13)
343 298
    
    
Fundamental value creation
(14)
(12) / (13)
16.6%

Potential

EBITDA LTM       19 846
 
EBITDA E       20 149
Mult aim       19.1x
 
EV E       384 153
NetDebt corr       20 473
 
Cap E       363 680
Cap       343 298
Growth potential            5.9%