As of December 15, 2025, Barratt Developments P L C's estimated intrinsic value ranges from $191.25 to $568.16 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $370.17 | -10.5% |
| Discounted Cash Flow (5Y) | $355.30 | -14.1% |
| Dividend Discount Model (Multi-Stage) | $338.80 | -18.1% |
| Dividend Discount Model (Stable) | $191.25 | -53.8% |
| Earnings Power Value | $568.16 | +37.4% |
Is Barratt Developments P L C (BDEV.L) undervalued or overvalued?
With the current market price at $413.60, the stock appears to be moderately overvalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Barratt Developments P L C'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 | 0.81 | 1.11 |
| Cost of equity | 8.9% | 12.8% |
| Cost of debt | 4.0% | 4.6% |
| Tax rate | 18.7% | 19.2% |
| Debt/Equity ratio | 0.04 | 0.04 |
| After-tax WACC | 8.6% | 12.4% |
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 | $355 | $4,378M | 58.3% |
| 10-Year Growth | $370 | $4,590M | 44.0% |
| 5-Year EBITDA | $384 | $4,790M | 61.9% |
| 10-Year EBITDA | $379 | $4,722M | 45.6% |
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 | $755M |
| Discount Rate (WACC) | 12.4% - 8.6% |
| Enterprise Value | $6,096M - $8,749M |
| Net Debt | $(704)M |
| Equity Value | $6,800M - $9,453M |
| Outstanding Shares | 14M |
| Fair Value | $475 - $661 |
| Selected Fair Value | $568.16 |
| Metric | Value |
|---|---|
| Market Capitalization | $5916M |
| Enterprise Value | $5212M |
| Trailing P/E | 27.06 |
| Forward P/E | 15.53 |
| Trailing EV/EBITDA | 9.40 |
| Current Dividend Yield | 555.65% |
| Dividend Growth Rate (5Y) | -5.47% |
| Debt-to-Equity Ratio | 0.04 |
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% | $111.05 |
| Discounted Cash Flow (5Y) | 25% | $88.82 |
| Dividend Discount Model (Multi-Stage) | 20% | $67.76 |
| Dividend Discount Model (Stable) | 15% | $28.69 |
| Earnings Power Value | 10% | $56.82 |
| Weighted Average | 100% | $353.14 |
Based on our comprehensive valuation analysis, Barratt Developments P L C's intrinsic value is $353.14, which is approximately 14.6% below the current market price of $413.60.
Key investment considerations:
Given these factors, we believe Barratt Developments P L C is currently moderately overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.