As of June 13, 2025, Johnson Matthey PLC's estimated intrinsic value ranges from $369.37 to $2540.38 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $2540.38 | +46.5% |
| Discounted Cash Flow (5Y) | $2393.75 | +38.0% |
| Dividend Discount Model (Multi-Stage) | $1615.86 | -6.8% |
| Dividend Discount Model (Stable) | $1595.92 | -8.0% |
| Earnings Power Value | $369.37 | -78.7% |
Is Johnson Matthey PLC (JMAT.L) undervalued or overvalued?
With the current market price at $1734.00, 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 Johnson Matthey 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 | 1.07 | 1.25 |
| Cost of equity | 10.4% | 13.7% |
| Cost of debt | 7.1% | 8.4% |
| Tax rate | 23.3% | 27.6% |
| Debt/Equity ratio | 0.6 | 0.6 |
| After-tax WACC | 8.6% | 10.9% |
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 | $2,394 | $4,910M | 56.8% |
| 10-Year Growth | $2,540 | $5,161M | 37.1% |
| 5-Year EBITDA | $2,776 | $5,565M | 61.8% |
| 10-Year EBITDA | $2,832 | $5,662M | 42.7% |
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 | $138M |
| Discount Rate (WACC) | 10.9% - 8.6% |
| Enterprise Value | $1,267M - $1,611M |
| Net Debt | $806M |
| Equity Value | $461M - $805M |
| Outstanding Shares | 2M |
| Fair Value | $269 - $470 |
| Selected Fair Value | $369.37 |
| Metric | Value |
|---|---|
| Market Capitalization | $2973M |
| Enterprise Value | $3779M |
| Trailing P/E | 7.97 |
| Forward P/E | 7.61 |
| Trailing EV/EBITDA | 5.65 |
| Current Dividend Yield | 482.30% |
| Dividend Growth Rate (5Y) | 8.66% |
| Debt-to-Equity Ratio | 0.60 |
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% | $762.11 |
| Discounted Cash Flow (5Y) | 25% | $598.44 |
| Dividend Discount Model (Multi-Stage) | 20% | $323.17 |
| Dividend Discount Model (Stable) | 15% | $239.39 |
| Earnings Power Value | 10% | $36.94 |
| Weighted Average | 100% | $1960.05 |
Based on our comprehensive valuation analysis, Johnson Matthey PLC's weighted average intrinsic value is $1960.05, which is approximately 13.0% above the current market price of $1734.00.
Key investment considerations:
Given these factors, we believe Johnson Matthey PLC is currently moderately undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.