As of December 15, 2025, Alliance Trust PLC's estimated intrinsic value ranges from $781.16 to $1892.73 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $1892.73 | +48.6% |
| Discounted Cash Flow (5Y) | $1702.11 | +33.6% |
| Dividend Discount Model (Multi-Stage) | $1237.45 | -2.9% |
| Dividend Discount Model (Stable) | $1263.74 | -0.8% |
| Earnings Power Value | $781.16 | -38.7% |
Is Alliance Trust PLC (ATST.L) undervalued or overvalued?
With the current market price at $1274.00, the stock appears to be moderately undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Alliance Trust 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 | 0.92 | 0.98 |
| Cost of equity | 9.5% | 11.9% |
| Cost of debt | 4.0% | 4.6% |
| Tax rate | 0.7% | 0.9% |
| Debt/Equity ratio | 0.05 | 0.05 |
| After-tax WACC | 9.3% | 11.5% |
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 | $1,702 | $6,833M | 64.9% |
| 10-Year Growth | $1,893 | $7,581M | 42.5% |
| 5-Year EBITDA | $1,721 | $6,906M | 65.3% |
| 10-Year EBITDA | $1,906 | $7,634M | 42.9% |
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 | $331M |
| Discount Rate (WACC) | 11.5% - 9.3% |
| Enterprise Value | $2,867M - $3,569M |
| Net Debt | $152M |
| Equity Value | $2,715M - $3,417M |
| Outstanding Shares | 4M |
| Fair Value | $692 - $871 |
| Selected Fair Value | $781.16 |
| Metric | Value |
|---|---|
| Market Capitalization | $5001M |
| Enterprise Value | $5152M |
| Trailing P/E | 8.31 |
| Forward P/E | 8.10 |
| Trailing EV/EBITDA | 10.25 |
| Current Dividend Yield | 145.65% |
| Dividend Growth Rate (5Y) | 11.76% |
| Debt-to-Equity Ratio | 0.05 |
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% | $567.82 |
| Discounted Cash Flow (5Y) | 25% | $425.53 |
| Dividend Discount Model (Multi-Stage) | 20% | $247.49 |
| Dividend Discount Model (Stable) | 15% | $189.56 |
| Earnings Power Value | 10% | $78.12 |
| Weighted Average | 100% | $1508.51 |
Based on our comprehensive valuation analysis, Alliance Trust PLC's intrinsic value is $1508.51, which is approximately 18.4% above the current market price of $1274.00.
Key investment considerations:
Given these factors, we believe Alliance Trust PLC is currently moderately undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.