As of June 10, 2025, International Biotechnology Trust PLC's estimated intrinsic value ranges from $238.77 to $579.84 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $454.53 | -25.0% |
| Discounted Cash Flow (5Y) | $434.47 | -28.3% |
| Dividend Discount Model (Multi-Stage) | $417.38 | -31.1% |
| Dividend Discount Model (Stable) | $579.84 | -4.3% |
| Earnings Power Value | $238.77 | -60.6% |
Is International Biotechnology Trust PLC (IBT.L) undervalued or overvalued?
With the current market price at $606.00, the stock appears to be significantly 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 International Biotechnology Trust 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 | 0.84 | 0.96 |
| Cost of equity | 9.0% | 11.7% |
| Cost of debt | 5.2% | 5.2% |
| Tax rate | 0.5% | 0.6% |
| Debt/Equity ratio | 0.12 | 0.12 |
| After-tax WACC | 8.6% | 11.0% |
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 | $434 | $173M | 70.5% |
| 10-Year Growth | $455 | $179M | 48.6% |
| 5-Year EBITDA | $297 | $128M | 60.2% |
| 10-Year EBITDA | $356 | $147M | 37.5% |
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 | $11M |
| Discount Rate (WACC) | 11.0% - 8.6% |
| Enterprise Value | $96M - $123M |
| Net Debt | $31M |
| Equity Value | $64M - $91M |
| Outstanding Shares | 0M |
| Fair Value | $198 - $280 |
| Selected Fair Value | $238.77 |
| Metric | Value |
|---|---|
| Market Capitalization | $197M |
| Enterprise Value | $229M |
| Trailing P/E | 11.22 |
| Forward P/E | 14.95 |
| Trailing EV/EBITDA | 8.20 |
| Current Dividend Yield | 557.82% |
| Dividend Growth Rate (5Y) | 3.05% |
| Debt-to-Equity Ratio | 0.12 |
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% | $136.36 |
| Discounted Cash Flow (5Y) | 25% | $108.62 |
| Dividend Discount Model (Multi-Stage) | 20% | $83.48 |
| Dividend Discount Model (Stable) | 15% | $86.98 |
| Earnings Power Value | 10% | $23.88 |
| Weighted Average | 100% | $439.30 |
Based on our comprehensive valuation analysis, International Biotechnology Trust PLC's weighted average intrinsic value is $439.30, which is approximately 27.5% below the current market price of $606.00.
Key investment considerations:
Given these factors, we believe International Biotechnology Trust PLC is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.