As of June 19, 2025, J D Wetherspoon PLC's estimated intrinsic value ranges from $472.43 to $1273.35 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $1094.62 | +49.6% |
| Discounted Cash Flow (5Y) | $939.89 | +28.5% |
| Dividend Discount Model (Multi-Stage) | $472.43 | -35.4% |
| Dividend Discount Model (Stable) | $611.42 | -16.4% |
| Earnings Power Value | $1273.35 | +74.1% |
Is J D Wetherspoon PLC (JDW.L) undervalued or overvalued?
With the current market price at $731.50, the stock appears to be moderately 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 J D Wetherspoon 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 | 0.83 | 0.93 |
| Cost of equity | 9.0% | 11.5% |
| Cost of debt | 4.7% | 7.6% |
| Tax rate | 15.3% | 22.4% |
| Debt/Equity ratio | 1.43 | 1.43 |
| After-tax WACC | 6.0% | 8.2% |
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 | $940 | $2,160M | 79.9% |
| 10-Year Growth | $1,095 | $2,332M | 63.5% |
| 5-Year EBITDA | $268 | $1,413M | 69.3% |
| 10-Year EBITDA | $514 | $1,687M | 49.6% |
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 | $176M |
| Discount Rate (WACC) | 8.2% - 6.0% |
| Enterprise Value | $2,146M - $2,914M |
| Net Debt | $1,115M |
| Equity Value | $1,031M - $1,799M |
| Outstanding Shares | 1M |
| Fair Value | $928 - $1,619 |
| Selected Fair Value | $1273.35 |
| Metric | Value |
|---|---|
| Market Capitalization | $813M |
| Enterprise Value | $1928M |
| Trailing P/E | 13.03 |
| Forward P/E | 16.04 |
| Trailing EV/EBITDA | 6.55 |
| Current Dividend Yield | 186.37% |
| Dividend Growth Rate (5Y) | -100.00% |
| Debt-to-Equity Ratio | 1.43 |
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% | $328.39 |
| Discounted Cash Flow (5Y) | 25% | $234.97 |
| Dividend Discount Model (Multi-Stage) | 20% | $94.49 |
| Dividend Discount Model (Stable) | 15% | $91.71 |
| Earnings Power Value | 10% | $127.34 |
| Weighted Average | 100% | $876.89 |
Based on our comprehensive valuation analysis, J D Wetherspoon PLC's weighted average intrinsic value is $876.89, which is approximately 19.9% above the current market price of $731.50.
Key investment considerations:
Given these factors, we believe J D Wetherspoon PLC is currently moderately undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.