As of June 19, 2025, Bellway PLC's estimated intrinsic value ranges from $1543.05 to $3069.84 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $2819.15 | -0.9% |
| Discounted Cash Flow (5Y) | $2775.48 | -2.5% |
| Dividend Discount Model (Multi-Stage) | $2355.04 | -17.3% |
| Dividend Discount Model (Stable) | $1543.05 | -45.8% |
| Earnings Power Value | $3069.84 | +7.9% |
Is Bellway PLC (BWY.L) undervalued or overvalued?
With the current market price at $2846.00, 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 Bellway 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 | 1 | 1.34 |
| Cost of equity | 9.9% | 14.4% |
| Cost of debt | 4.4% | 4.6% |
| Tax rate | 19.6% | 21.9% |
| Debt/Equity ratio | 0.05 | 0.05 |
| After-tax WACC | 9.7% | 13.9% |
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 | $2,775 | $2,970M | 64.5% |
| 10-Year Growth | $2,819 | $3,016M | 43.1% |
| 5-Year EBITDA | $2,672 | $2,859M | 63.2% |
| 10-Year EBITDA | $2,808 | $3,004M | 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 | $374M |
| Discount Rate (WACC) | 13.9% - 9.7% |
| Enterprise Value | $2,695M - $3,873M |
| Net Debt | $8M |
| Equity Value | $2,687M - $3,865M |
| Outstanding Shares | 1M |
| Fair Value | $2,518 - $3,622 |
| Selected Fair Value | $3069.84 |
| Metric | Value |
|---|---|
| Market Capitalization | $3037M |
| Enterprise Value | $3045M |
| Trailing P/E | 20.67 |
| Forward P/E | 16.40 |
| Trailing EV/EBITDA | 7.55 |
| Current Dividend Yield | 203.91% |
| Dividend Growth Rate (5Y) | 1.70% |
| 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% | $845.74 |
| Discounted Cash Flow (5Y) | 25% | $693.87 |
| Dividend Discount Model (Multi-Stage) | 20% | $471.01 |
| Dividend Discount Model (Stable) | 15% | $231.46 |
| Earnings Power Value | 10% | $306.98 |
| Weighted Average | 100% | $2549.06 |
Based on our comprehensive valuation analysis, Bellway PLC's weighted average intrinsic value is $2549.06, which is approximately 10.4% below the current market price of $2846.00.
Key investment considerations:
Given these factors, we believe Bellway PLC is currently moderately overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.