As of May 22, 2025, Euromoney Institutional Investor PLC's estimated intrinsic value ranges from $437.84 to $2988.40 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $1232.47 | -15.6% |
| Discounted Cash Flow (5Y) | $1006.54 | -31.1% |
| Dividend Discount Model (Multi-Stage) | $939.67 | -35.6% |
| Dividend Discount Model (Stable) | $437.84 | -70.0% |
| Earnings Power Value | $2988.40 | +104.7% |
Is Euromoney Institutional Investor PLC (ERM.L) undervalued or overvalued?
With the current market price at $1460.00, 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 Euromoney Institutional Investor 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 | 0.33 | 0.4 |
| Cost of equity | 6.0% | 7.8% |
| Cost of debt | 4.6% | 4.6% |
| Tax rate | 19.0% | 31.2% |
| Debt/Equity ratio | 0.04 | 0.04 |
| After-tax WACC | 5.9% | 7.6% |
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 | $1,007 | $1,148M | 89.0% |
| 10-Year Growth | $1,232 | $1,395M | 79.4% |
| 5-Year EBITDA | $359 | $439M | 71.3% |
| 10-Year EBITDA | $506 | $600M | 52.2% |
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 | $221M |
| Discount Rate (WACC) | 7.6% - 5.9% |
| Enterprise Value | $2,896M - $3,739M |
| Net Debt | $46M |
| Equity Value | $2,849M - $3,692M |
| Outstanding Shares | 1M |
| Fair Value | $2,603 - $3,373 |
| Selected Fair Value | $2988.40 |
| Metric | Value |
|---|---|
| Market Capitalization | $1598M |
| Enterprise Value | $1644M |
| Trailing P/E | 176.44 |
| Forward P/E | 67.26 |
| Trailing EV/EBITDA | 6.40 |
| Current Dividend Yield | 123.03% |
| Dividend Growth Rate (5Y) | -11.56% |
| 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% | $369.74 |
| Discounted Cash Flow (5Y) | 25% | $251.64 |
| Dividend Discount Model (Multi-Stage) | 20% | $187.93 |
| Dividend Discount Model (Stable) | 15% | $65.68 |
| Earnings Power Value | 10% | $298.84 |
| Weighted Average | 100% | $1173.83 |
Based on our comprehensive valuation analysis, Euromoney Institutional Investor PLC's weighted average intrinsic value is $1173.83, which is approximately 19.6% below the current market price of $1460.00.
Key investment considerations:
Given these factors, we believe Euromoney Institutional Investor PLC is currently moderately overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.