As of May 27, 2025, Kingfisher PLC's estimated intrinsic value ranges from $152.34 to $438.83 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $241.12 | -18.3% |
| Discounted Cash Flow (5Y) | $220.89 | -25.2% |
| Dividend Discount Model (Multi-Stage) | $203.95 | -30.9% |
| Dividend Discount Model (Stable) | $152.34 | -48.4% |
| Earnings Power Value | $438.83 | +48.6% |
Is Kingfisher PLC (KGF.L) undervalued or overvalued?
With the current market price at $295.30, 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 Kingfisher 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 | 0.68 | 0.77 |
| Cost of equity | 8.0% | 10.3% |
| Cost of debt | 5.2% | 5.5% |
| Tax rate | 22.4% | 24.7% |
| Debt/Equity ratio | 0.42 | 0.42 |
| After-tax WACC | 6.9% | 8.5% |
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 | $221 | $6,091M | 79.7% |
| 10-Year Growth | $241 | $6,467M | 64.0% |
| 5-Year EBITDA | $136 | $4,518M | 72.6% |
| 10-Year EBITDA | $163 | $5,018M | 53.6% |
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 | $770M |
| Discount Rate (WACC) | 8.5% - 6.9% |
| Enterprise Value | $9,052M - $11,234M |
| Net Debt | $1,984M |
| Equity Value | $7,068M - $9,250M |
| Outstanding Shares | 19M |
| Fair Value | $380 - $497 |
| Selected Fair Value | $438.83 |
| Metric | Value |
|---|---|
| Market Capitalization | $5490M |
| Enterprise Value | $7474M |
| Trailing P/E | 29.68 |
| Forward P/E | 22.05 |
| Trailing EV/EBITDA | 5.30 |
| Current Dividend Yield | 415.27% |
| Dividend Growth Rate (5Y) | 2.93% |
| Debt-to-Equity Ratio | 0.42 |
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% | $72.34 |
| Discounted Cash Flow (5Y) | 25% | $55.22 |
| Dividend Discount Model (Multi-Stage) | 20% | $40.79 |
| Dividend Discount Model (Stable) | 15% | $22.85 |
| Earnings Power Value | 10% | $43.88 |
| Weighted Average | 100% | $235.08 |
Based on our comprehensive valuation analysis, Kingfisher PLC's weighted average intrinsic value is $235.08, which is approximately 20.4% below the current market price of $295.30.
Key investment considerations:
Given these factors, we believe Kingfisher PLC is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.