Parkev Tatevosian, CFA on $PG (Oct 27, 2026)

Procter & Gamble just announced that its revenue growth accelerated to 4% . This was not solely a result of price increases. Note that the company's sales volume actually increased by 2.4 percentage points.

This surprises me, because when you raise prices as much as Procter & Gamble has done over the past six years or so, volume growth usually turns negative.

All of this makes what Procter & Gamble achieved in its last quarter even more impressive, and I am not surprised to see the stock price rise after the company announced these results.

I have rated Procter & Gamble stock as a buy opportunity throughout the year , and discussed how it is one of the best- managed companies in the world, and that its valuation has been attractive almost all year.

But although I still believe that this is the case after the release of these quarterly results, let's take a closer look and answer this question together.

So, while revenue results are accelerating, things aren't entirely rosy for Procter & Gamble. Profits are under significant pressure due to rising commodity, energy, and shipping costs, particularly in North America.

Procter & Gamble fights these forces by working to improve efficiency and productivity, and in some cases, resorting to strategic price increases to offset some of these higher costs.

Over the next few years, analysts who follow Procter & Gamble expect it to achieve earnings per share growth of around 5%.

Typically, when Procter & Gamble's revenue grows by, say, 3%, it grows its earnings per share by 6% or more. There is an inherent competitive advantage to the business, where costs remain relatively constant as revenues increase, creating a larger gap between its revenues and profitability.

However, as the management team has emphasized and continues to emphasize for several years now, cost pressures have been higher than usual. So, costs are increasing. Revenues are also increasing, but the company's costs are increasing faster than they might be under other circumstances.

However, Procter & Gamble has done a great job of maintaining high profit margins. Over the past twelve months and at 23.9%, this is almost the highest operating profit margin the company has achieved in a decade.

Therefore, a salute to the management team for achieving a near-record operating profit margin in an environment witnessing multiple wars that are driving up oil prices ; With tariffs and trade barriers that are the highest compared to previous decades; At a time when consumer spending is facing significant challenges as a result of those macroeconomic forces highlighted earlier.

All of this presents a challenge for the company, yet they have continued to achieve a near-record operating profit margin.

This is yet another achievement to add to Procter & Gamble’s record, which has shown excellent management over decades, but more specifically during the last decade, the company’s performance has improved significantly.

You can see a tangible improvement in the return on invested capital for the company. In 2017, 2018 and 2019, returns on invested capital ranged between 10% and 12%. Then came the major upheavals surrounding the pandemic.

But since the economic reopening, their returns on invested capital have increased. Currently, it is in the range of 17% to 19%, which is much better than the range of 10% to 12% it was in before the pandemic.

Therefore, the rating was very attractive for Procter & Gamble, in my opinion, throughout the year. That's why I've made several videos in which I emphasize my belief that this was an excellent buying opportunity.

So , I'm pleased to see the stock outperform during 2026. It has risen by 15.5% plus dividends, which is a significant outperformance when viewed on a risk-adjusted basis , as Procter & Gamble is one of the least risky stocks you can buy in the market.

No stock is risk-free, but Procter & Gamble falls on the least risky side of all the stocks you can buy.

Therefore, I have also updated my assessment of Procter & Gamble's discounted cash flows. I now value the company at $163 per share . It is currently trading at $166 per share, which is within my safety margin .

I would say that it appears fairly valued when using the discounted cash flow model , and it also appears fairly valued when using the forward price-to-earnings model. Therefore, I have repeated this buy recommendation several times this year with a high level of confidence, and it was last updated on July 7.

Today, I will reiterate that rating in which I see Procter & Gamble as an excellent investment at current market prices , and I have a high level of confidence that this will be a good investment if you buy it and hold it for the next 5 to 10 years.