As of June 12, 2025, Airtel Africa PLC's estimated intrinsic value ranges from $40.39 to $287.00 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $287.00 | +62.5% |
| Discounted Cash Flow (5Y) | $224.49 | +27.1% |
| Dividend Discount Model (Multi-Stage) | $95.04 | -46.2% |
| Dividend Discount Model (Stable) | $40.39 | -77.1% |
| Earnings Power Value | $210.50 | +19.2% |
Is Airtel Africa PLC (AAF.L) undervalued or overvalued?
With the current market price at $176.60, the stock appears to be fairly valued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Airtel Africa PLC's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.76 | 0.9 |
| Cost of equity | 8.5% | 11.3% |
| Cost of debt | 7.6% | 10.9% |
| Tax rate | 39.6% | 40.8% |
| Debt/Equity ratio | 0.51 | 0.51 |
| After-tax WACC | 7.2% | 9.7% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $304 | $17,072M | 68.8% |
| 10-Year Growth | $388 | $20,161M | 50.4% |
| 5-Year EBITDA | $342 | $18,468M | 71.1% |
| 10-Year EBITDA | $420 | $21,324M | 53.1% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $1,353M |
| Discount Rate (WACC) | 9.7% - 7.2% |
| Enterprise Value | $13,992M - $18,770M |
| Net Debt | $5,982M |
| Equity Value | $8,010M - $12,788M |
| Outstanding Shares | 37M |
| Fair Value | $219 - $350 |
| Selected Fair Value | $210.50 |
| Metric | Value |
|---|---|
| Market Capitalization | $6450M |
| Enterprise Value | $10873M |
| Trailing P/E | 39.66 |
| Forward P/E | 21.21 |
| Trailing EV/EBITDA | 6.70 |
| Current Dividend Yield | 260.56% |
| Dividend Growth Rate (5Y) | 7.89% |
| Debt-to-Equity Ratio | 0.68 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $86.10 |
| Discounted Cash Flow (5Y) | 25% | $56.12 |
| Dividend Discount Model (Multi-Stage) | 20% | $19.01 |
| Dividend Discount Model (Stable) | 15% | $6.06 |
| Earnings Power Value | 10% | $21.05 |
| Weighted Average | 100% | $188.34 |
Based on our comprehensive valuation analysis, Airtel Africa PLC's weighted average intrinsic value is $188.34, which is approximately 6.6% above the current market price of $176.60.
Key investment considerations:
Given these factors, we believe Airtel Africa PLC is currently fairly valued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.