What is GENL.L's Intrinsic value?

Genel Energy PLC (GENL.L) Intrinsic Value Analysis

Executive Summary

As of May 23, 2025, Genel Energy PLC's estimated intrinsic value ranges from $291.63 to $291.63 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Earnings Power Value $291.63 +443.1%

Is Genel Energy PLC (GENL.L) undervalued or overvalued?

With the current market price at $53.70, 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 Genel Energy PLC's intrinsic value, including:

  1. 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 0.46 0.56
Cost of equity 6.8% 8.9%
Cost of debt 7.0% 8.7%
Tax rate 0.1% 0.2%
Debt/Equity ratio 0.34 0.34
After-tax WACC 6.8% 8.9%

Valuation Methods

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 $70M
Discount Rate (WACC) 8.9% - 6.8%
Enterprise Value $787M - $1,022M
Net Debt $(131)M
Equity Value $918M - $1,153M
Outstanding Shares 3M
Fair Value $343 - $431
Selected Fair Value $291.63

Key Financial Metrics

Metric Value
Market Capitalization $144M
Enterprise Value $45M
Trailing P/E 0.00
Forward P/E 0.00
Trailing EV/EBITDA 0.90
Current Dividend Yield 0.00%
Dividend Growth Rate (5Y) -100.00%
Debt-to-Equity Ratio 0.34

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
Earnings Power Value 100% $29.16
Weighted Average 100% $291.63

Investment Conclusion

Based on our comprehensive valuation analysis, Genel Energy PLC's weighted average intrinsic value is $291.63, which is approximately 443.1% above the current market price of $53.70.

Key investment considerations:

  • Strong projected earnings growth (-83% to -58% margin)
  • Consistent cash flow generation

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