What is JMI.L's DCF valuation?

JPmorgan Smaller Companies Investment Trust PLC (JMI.L) DCF Valuation Analysis

Executive Summary

As of December 15, 2025, JPmorgan Smaller Companies Investment Trust PLC has a Discounted Cash Flow (DCF) derived fair value of $0.00 per share. With the current market price at $293.50, this represents a potential upside of -188.0%.

Key Metrics Value
DCF Fair Value (5-year) $0.00
DCF Fair Value (10-year) $0.00
Potential Upside (5-year) -193.2%
Potential Upside (10-year) -188.0%
Discount Rate (WACC) 8.5% - 11.6%

Financial Performance & Projections

Revenue Trends

Fiscal Year Revenue (USD millions) Growth
07-2023 (9) 88%
07-2024 (10) 5%
07-2025 (10) 3%
07-2026 (11) 7%
07-2027 (11) 2%
07-2028 (11) 2%
07-2029 (11) 2%
07-2030 (12) 3%
07-2031 (12) 2%
07-2032 (12) 2%
07-2033 (12) 2%

Profitability Projections

Net profit margin is expected to improve from 140% in 07-2023 to -1624% by 07-2033, driven by operational efficiency and economies of scale.

Fiscal Year Net Profit (USD millions) Profit Margin
07-2023 (13) 140%
07-2024 (13) -1332%
07-2025 (14) -1357%
07-2026 (14) -1439%
07-2027 (15) -1452%
07-2028 (15) -1466%
07-2029 (15) -1493%
07-2030 (15) -1539%
07-2031 (16) -1567%
07-2032 (16) -1595%
07-2033 (16) -1624%

DCF Model Components

1. Capital Expenditures (CapEx)

with a 5-year average of $0 million. Projected CapEx is expected to maintain at approximately 0% of revenue.

2. Depreciation & Amortization

Depreciation is based on an average useful life of 5 years for capital assets.

Fiscal Year D&A (USD millions)
07-2024 0
07-2025 0
07-2026 0
07-2027 0
07-2028 0
07-2029 0

3. Working Capital Requirements

Net working capital is expected to increase gradually, with projected changes affecting free cash flow.

Components Average Days
Days Receivables 0
Days Inventory 0
Days Payables 118

4. Free Cash Flow Projections

Fiscal Year EBITDA Tax CapEx Change in NWC FCF
2024 (13) (0) (0) (1) (13)
2025 (14) (0) (0) 0 (14)
2026 (14) (0) (0) 0 (14)
2027 (15) (0) (0) (0) (14)
2028 (15) (0) (0) 0 (15)

DCF Valuation Parameters

Key Assumptions

  • Discount Rate (WACC): WACC / Discount Rate (selected: 8.5% - 11.6%)
  • Long-Term Growth Rate: Long-term Growth Rate (selected: 3.0% - 5.0%)
  • Terminal EV/EBITDA Multiple: 7.4x (based on peer average)

Valuation Summary

Valuation Method Fair Price (USD) Potential Upside
5-Year DCF (Growth) 0.00 -193.2%
10-Year DCF (Growth) 0.00 -188.0%
5-Year DCF (EBITDA) 0.00 -100.0%
10-Year DCF (EBITDA) 0.00 -100.0%

Enterprise Value Breakdown

  • 5-Year Model: $(212)M
  • 10-Year Model: $(200)M

Investment Conclusion

Is JPmorgan Smaller Companies Investment Trust PLC (JMI.L) a buy or a sell? JPmorgan Smaller Companies Investment Trust PLC is definitely a sell. Based on our DCF analysis, JPmorgan Smaller Companies Investment Trust PLC (JMI.L) appears to be overvalued with upside potential of -188.0%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.

Key investment drivers include:

  • Strong free cash flow generation

Investors should consider reducing exposure at the current market price of $293.50.