What is ENPL.L's Intrinsic value?

En+ Group PAO (ENPL.L) Intrinsic Value Analysis

Executive Summary

As of May 27, 2025, En+ Group PAO's estimated intrinsic value ranges from $6.99 to $40.57 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Discounted Cash Flow (10Y) $7.72 -17.0%
Discounted Cash Flow (5Y) $6.99 -24.8%
Dividend Discount Model (Multi-Stage) $20.14 +116.6%
Dividend Discount Model (Stable) $40.57 +336.3%
Earnings Power Value $7.72 -17.0%

Is En+ Group PAO (ENPL.L) undervalued or overvalued?

With the current market price at $9.30, 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 En+ Group PAO'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 0.8% 1.3%
Equity market risk premium 5.3% 6.3%
Adjusted beta 1.19 1.36
Cost of equity 7.1% 10.4%
Cost of debt 7.1% 10.8%
Tax rate 15.8% 17.6%
Debt/Equity ratio 1.59 1.59
After-tax WACC 6.4% 9.5%

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: 7.9% (range: 0.0% - 9.3%)

Key Projections:

  • Revenue growth from $10,356 (FY12-2020) to $18,232 (FY12-2030)
  • Net profit margin expansion from 10% to 10%
  • Capital expenditures maintained at approximately 9% of revenue
DCF Model Fair Value Enterprise Value % from Terminal Value
5-Year Growth $8 $15,257M 79.7%
10-Year Growth $9 $15,818M 64.7%
5-Year EBITDA $4 $13,102M 76.4%
10-Year EBITDA $6 $14,702M 62.0%

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: 8.8%
  • Long-term growth rate: 3.5%
  • Fair value: $20.14 (116.6% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 10.4% (Low) to 7.1% (High)
  • Long-term growth rate: 2.5% (Low) to 4.5% (High)
  • Fair value range: $20 to $78
  • Selected fair value: $40.57 (336.3% 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 $1,211M
Discount Rate (WACC) 9.5% - 6.4%
Enterprise Value $12,803M - $18,837M
Net Debt $9,852M
Equity Value $2,951M - $8,985M
Outstanding Shares 639M
Fair Value $5 - $14
Selected Fair Value $7.72

Key Financial Metrics

Metric Value
Market Capitalization $7189M
Enterprise Value $17041M
Trailing P/E 4.93
Forward P/E 6.68
Trailing EV/EBITDA 6.15
Current Dividend Yield 0.00%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 1.59

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) 30% $2.32
Discounted Cash Flow (5Y) 25% $1.75
Dividend Discount Model (Multi-Stage) 20% $4.03
Dividend Discount Model (Stable) 15% $6.09
Earnings Power Value 10% $0.77
Weighted Average 100% $14.95

Investment Conclusion

Based on our comprehensive valuation analysis, En+ Group PAO's weighted average intrinsic value is $14.95, which is approximately 60.7% above the current market price of $9.30.

Key investment considerations:

  • Strong projected earnings growth (10% to 10% margin)
  • Consistent cash flow generation

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