As of May 24, 2025, Easyjet PLC's estimated intrinsic value ranges from $590.16 to $2207.33 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $909.95 | +64.3% |
| Discounted Cash Flow (5Y) | $590.16 | +6.5% |
| Dividend Discount Model (Multi-Stage) | $677.30 | +22.3% |
| Dividend Discount Model (Stable) | $677.56 | +22.3% |
| Earnings Power Value | $2207.33 | +298.4% |
Is Easyjet PLC (EZJ.L) undervalued or overvalued?
With the current market price at $554.00, the stock appears to be significantly undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Easyjet 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 | 0.74 | 1.01 |
| Cost of equity | 8.4% | 12.1% |
| Cost of debt | 4.6% | 5.2% |
| Tax rate | 18.1% | 21.2% |
| Debt/Equity ratio | 0.79 | 0.79 |
| After-tax WACC | 6.4% | 8.6% |
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 | $590 | $6,441M | 80.8% |
| 10-Year Growth | $910 | $8,882M | 66.3% |
| 5-Year EBITDA | $743 | $7,607M | 83.7% |
| 10-Year EBITDA | $1,012 | $9,658M | 69.0% |
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 | $1,371M |
| Discount Rate (WACC) | 8.6% - 6.4% |
| Enterprise Value | $16,038M - $21,528M |
| Net Debt | $1,937M |
| Equity Value | $14,101M - $19,591M |
| Outstanding Shares | 8M |
| Fair Value | $1,848 - $2,567 |
| Selected Fair Value | $2207.33 |
| Metric | Value |
|---|---|
| Market Capitalization | $4228M |
| Enterprise Value | $6165M |
| Trailing P/E | 9.35 |
| Forward P/E | 8.25 |
| Trailing EV/EBITDA | 4.45 |
| Current Dividend Yield | 0.00% |
| Dividend Growth Rate (5Y) | 0.00% |
| Debt-to-Equity Ratio | 0.79 |
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% | $272.99 |
| Discounted Cash Flow (5Y) | 25% | $147.54 |
| Dividend Discount Model (Multi-Stage) | 20% | $135.46 |
| Dividend Discount Model (Stable) | 15% | $101.63 |
| Earnings Power Value | 10% | $220.73 |
| Weighted Average | 100% | $878.35 |
Based on our comprehensive valuation analysis, Easyjet PLC's weighted average intrinsic value is $878.35, which is approximately 58.5% above the current market price of $554.00.
Key investment considerations:
Given these factors, we believe Easyjet PLC is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.