As of June 18, 2025, Howden Joinery Group PLC's estimated intrinsic value ranges from $654.58 to $2493.95 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $861.81 | -1.5% |
| Discounted Cash Flow (5Y) | $809.77 | -7.5% |
| Dividend Discount Model (Multi-Stage) | $654.58 | -25.2% |
| Dividend Discount Model (Stable) | $728.00 | -16.8% |
| Earnings Power Value | $2493.95 | +185.0% |
Is Howden Joinery Group PLC (HWDN.L) undervalued or overvalued?
With the current market price at $875.00, the stock appears to be fairly valued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Howden Joinery Group 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 | 0.65 | 0.91 |
| Cost of equity | 7.9% | 11.3% |
| Cost of debt | 4.0% | 4.6% |
| Tax rate | 20.0% | 21.1% |
| Debt/Equity ratio | 0.15 | 0.15 |
| After-tax WACC | 7.3% | 10.3% |
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 | $810 | $4,605M | 74.2% |
| 10-Year Growth | $862 | $4,879M | 56.7% |
| 5-Year EBITDA | $950 | $5,344M | 77.7% |
| 10-Year EBITDA | $952 | $5,354M | 60.6% |
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 | $1,150M |
| Discount Rate (WACC) | 10.3% - 7.3% |
| Enterprise Value | $11,138M - $15,824M |
| Net Debt | $337M |
| Equity Value | $10,801M - $15,486M |
| Outstanding Shares | 5M |
| Fair Value | $2,049 - $2,939 |
| Selected Fair Value | $2493.95 |
| Metric | Value |
|---|---|
| Market Capitalization | $4611M |
| Enterprise Value | $4949M |
| Trailing P/E | 18.50 |
| Forward P/E | 16.78 |
| Trailing EV/EBITDA | 11.85 |
| Current Dividend Yield | 252.05% |
| Dividend Growth Rate (5Y) | 12.52% |
| Debt-to-Equity Ratio | 0.15 |
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% | $258.54 |
| Discounted Cash Flow (5Y) | 25% | $202.44 |
| Dividend Discount Model (Multi-Stage) | 20% | $130.92 |
| Dividend Discount Model (Stable) | 15% | $109.20 |
| Earnings Power Value | 10% | $249.40 |
| Weighted Average | 100% | $950.50 |
Based on our comprehensive valuation analysis, Howden Joinery Group PLC's weighted average intrinsic value is $950.50, which is approximately 8.6% above the current market price of $875.00.
Key investment considerations:
Given these factors, we believe Howden Joinery Group PLC is currently fairly valued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.