What is CBP.L's Intrinsic value?

Curtis Banks Group PLC (CBP.L) Intrinsic Value Analysis

Executive Summary

As of May 23, 2025, Curtis Banks Group PLC's estimated intrinsic value ranges from $11.60 to $2501.91 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Discounted Cash Flow (10Y) $2501.91 +616.9%
Discounted Cash Flow (5Y) $2242.55 +542.6%
Dividend Discount Model (Multi-Stage) $11.60 -96.7%
Earnings Power Value $1478.30 +323.6%

Is Curtis Banks Group PLC (CBP.L) undervalued or overvalued?

With the current market price at $349.00, the stock appears to be significantly undervalued.

Understanding Intrinsic Value

Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Curtis Banks Group PLC's intrinsic value, including:

  1. Discounted Cash Flow (DCF): Values the company based on projected future cash flows
  2. Dividend Discount Model (DDM): Values the company based on expected future dividend payments
  3. Earnings Power Value (EPV): Values the company based on its current earnings power, assuming no growth

Weighted Average Cost of Capital (WACC)

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 0.9 0.96
Cost of equity 9.3% 11.7%
Cost of debt 4.0% 7.0%
Tax rate 18.8% 20.4%
Debt/Equity ratio 0.36 0.36
After-tax WACC 7.7% 10.1%

Valuation Methods

1. Discounted Cash Flow (DCF) Valuation

Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:

  • Forecast Period: 5-year DCF and 10-year DCF
  • Terminal Growth Rate: 0.0% (range: 3.0% - 5.0%)
  • Discount Rate: 8.9% (range: 0.0% - 9.3%)

Key Projections:

  • Revenue growth from $(220) (FY12-2022) to $101 (FY12-2032)
  • Net profit margin expansion from 3% to 1%
  • Capital expenditures maintained at approximately 46% of revenue
DCF Model Fair Value Enterprise Value % from Terminal Value
5-Year Growth $2,243 $1,168M 67.6%
10-Year Growth $2,502 $1,340M 47.7%
5-Year EBITDA $1,907 $945M 60.0%
10-Year EBITDA $2,219 $1,152M 39.2%

2. Dividend Discount Model (DDM)

The DDM values a company based on its expected future dividend payments. We used two approaches:

Multi-Stage DDM:

  • Current payout ratio: 0.0%
  • Stable payout ratio: 90.0%
  • Growth transition: 5 years
  • Cost of equity: 10.5%
  • Long-term growth rate: 0.5%
  • Fair value: $11.60 (-96.7% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 11.7% (Low) to 9.3% (High)
  • Long-term growth rate: 0.0% (Low) to 1.0% (High)
  • Fair value range: $(60) to $(109)
  • Selected fair value: $-84.70 (-124.3% from current price)

3. Earnings Power Value (EPV)

EPV assesses a company's value based on its current normalized earnings power, assuming no growth.

EPV Component Value
Normalized Earnings $58M
Discount Rate (WACC) 10.1% - 7.7%
Enterprise Value $573M - $747M
Net Debt $(322)M
Equity Value $895M - $1,069M
Outstanding Shares 1M
Fair Value $1,347 - $1,609
Selected Fair Value $1478.30

Key Financial Metrics

Metric Value
Market Capitalization $232M
Enterprise Value $-90M
Trailing P/E 0.00
Forward P/E 221.59
Trailing EV/EBITDA 6.20
Current Dividend Yield 258.12%
Dividend Growth Rate (5Y) 13.33%
Debt-to-Equity Ratio 0.36

Investment Decision Framework

To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:

  1. Forecast Certainty: DCF methods rely on long-term projections, while earnings power value focuses on current normalized earnings
  2. Business Model Alignment: Dividend models are more appropriate for mature companies with established dividend policies
  3. Historical Accuracy: How well each method has predicted fair value historically

Valuation Weight Matrix

Valuation Method Weight Weighted Value
Discounted Cash Flow (10Y) 35% $750.57
Discounted Cash Flow (5Y) 29% $560.64
Dividend Discount Model (Multi-Stage) 24% $2.32
Earnings Power Value 12% $147.83
Weighted Average 100% $1719.25

Investment Conclusion

Based on our comprehensive valuation analysis, Curtis Banks Group PLC's weighted average intrinsic value is $1719.25, which is approximately 392.6% above the current market price of $349.00.

Key investment considerations:

  • Strong projected earnings growth (3% to 1% margin)
  • Consistent cash flow generation
  • Historical dividend growth of 13.33%

Given these factors, we believe Curtis Banks Group PLC is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.