As of May 22, 2025, JPMorgan European Smaller Companies Trust PLC's estimated intrinsic value ranges from $403.48 to $2541.34 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $2541.34 | +453.7% |
| Discounted Cash Flow (5Y) | $2376.05 | +417.7% |
| Dividend Discount Model (Multi-Stage) | $1607.79 | +250.3% |
| Dividend Discount Model (Stable) | $1202.78 | +162.0% |
| Earnings Power Value | $403.48 | -12.1% |
Is JPMorgan European Smaller Companies Trust PLC (JESC.L) undervalued or overvalued?
With the current market price at $459.00, the stock appears to be significantly 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 JPMorgan European Smaller Companies 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 | 1.12 | 1.23 |
| Cost of equity | 8.9% | 11.7% |
| Cost of debt | 4.0% | 4.5% |
| Tax rate | 0.6% | 1.1% |
| Debt/Equity ratio | 0.1 | 0.1 |
| After-tax WACC | 8.5% | 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 | $2,376 | $4,005M | 63.6% |
| 10-Year Growth | $2,541 | $4,278M | 42.0% |
| 5-Year EBITDA | $1,474 | $2,514M | 42.0% |
| 10-Year EBITDA | $1,905 | $3,225M | 23.1% |
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 | $71M |
| Discount Rate (WACC) | 11.0% - 8.5% |
| Enterprise Value | $645M - $840M |
| Net Debt | $75M |
| Equity Value | $570M - $765M |
| Outstanding Shares | 2M |
| Fair Value | $345 - $462 |
| Selected Fair Value | $403.48 |
| Metric | Value |
|---|---|
| Market Capitalization | $759M |
| Enterprise Value | $834M |
| Trailing P/E | 3.30 |
| Forward P/E | 2.16 |
| Trailing EV/EBITDA | 4.45 |
| Current Dividend Yield | 281.49% |
| Dividend Growth Rate (5Y) | 20.17% |
| Debt-to-Equity Ratio | 0.10 |
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% | $762.40 |
| Discounted Cash Flow (5Y) | 25% | $594.01 |
| Dividend Discount Model (Multi-Stage) | 20% | $321.56 |
| Dividend Discount Model (Stable) | 15% | $180.42 |
| Earnings Power Value | 10% | $40.35 |
| Weighted Average | 100% | $1898.74 |
Based on our comprehensive valuation analysis, JPMorgan European Smaller Companies Trust PLC's weighted average intrinsic value is $1898.74, which is approximately 313.7% above the current market price of $459.00.
Key investment considerations:
Given these factors, we believe JPMorgan European Smaller Companies Trust PLC is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.