As of June 9, 2025, European Opportunities Trust PLC's estimated intrinsic value ranges from $134.79 to $185.47 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $170.07 | -76.2% |
| Discounted Cash Flow (5Y) | $166.75 | -76.6% |
| Dividend Discount Model (Multi-Stage) | $140.97 | -80.3% |
| Dividend Discount Model (Stable) | $134.79 | -81.1% |
| Earnings Power Value | $185.47 | -74.0% |
Is European Opportunities Trust PLC (JEO.L) undervalued or overvalued?
With the current market price at $714.00, 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 European Opportunities 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 | 2.9% | 3.4% |
| Equity market risk premium | 5.3% | 6.3% |
| Adjusted beta | 0.77 | 0.85 |
| Cost of equity | 7.1% | 9.3% |
| Cost of debt | 4.0% | 7.0% |
| Tax rate | 1.6% | 7.8% |
| Debt/Equity ratio | 0.08 | 0.08 |
| After-tax WACC | 6.8% | 9.1% |
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 | $167 | $176M | 82.7% |
| 10-Year Growth | $170 | $180M | 67.9% |
| 5-Year EBITDA | $71 | $69M | 55.9% |
| 10-Year EBITDA | $89 | $90M | 35.8% |
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 | $15M |
| Discount Rate (WACC) | 9.1% - 6.8% |
| Enterprise Value | $169M - $225M |
| Net Debt | $(10)M |
| Equity Value | $179M - $235M |
| Outstanding Shares | 1M |
| Fair Value | $160 - $211 |
| Selected Fair Value | $185.47 |
| Metric | Value |
|---|---|
| Market Capitalization | $796M |
| Enterprise Value | $786M |
| Trailing P/E | 144.78 |
| Forward P/E | 133.84 |
| Trailing EV/EBITDA | 6.80 |
| Current Dividend Yield | 126.85% |
| Dividend Growth Rate (5Y) | -10.77% |
| Debt-to-Equity Ratio | 0.08 |
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% | $51.02 |
| Discounted Cash Flow (5Y) | 25% | $41.69 |
| Dividend Discount Model (Multi-Stage) | 20% | $28.19 |
| Dividend Discount Model (Stable) | 15% | $20.22 |
| Earnings Power Value | 10% | $18.55 |
| Weighted Average | 100% | $159.67 |
Based on our comprehensive valuation analysis, European Opportunities Trust PLC's weighted average intrinsic value is $159.67, which is approximately 77.6% below the current market price of $714.00.
Key investment considerations:
Given these factors, we believe European Opportunities Trust PLC is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.