As of May 24, 2025, Kier Group PLC has a Discounted Cash Flow (DCF) derived fair value of $319.79 per share. With the current market price at $165.60, this represents a potential upside of 93.1%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $297.52 |
| DCF Fair Value (10-year) | $319.79 |
| Potential Upside (5-year) | 79.7% |
| Potential Upside (10-year) | 93.1% |
| Discount Rate (WACC) | 6.1% - 9.0% |
Revenue is projected to grow from $3905 million in 06-2024 to $5407 million by 06-2034, representing a compound annual growth rate of approximately 3.3%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 06-2024 | 3905 | 16% |
| 06-2025 | 4253 | 9% |
| 06-2026 | 4430 | 4% |
| 06-2027 | 4566 | 3% |
| 06-2028 | 4658 | 2% |
| 06-2029 | 4765 | 2% |
| 06-2030 | 4861 | 2% |
| 06-2031 | 5062 | 4% |
| 06-2032 | 5163 | 2% |
| 06-2033 | 5301 | 3% |
| 06-2034 | 5407 | 2% |
Net profit margin is expected to improve from 1% in 06-2024 to 1% by 06-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 06-2024 | 51 | 1% |
| 06-2025 | 57 | 1% |
| 06-2026 | 59 | 1% |
| 06-2027 | 61 | 1% |
| 06-2028 | 62 | 1% |
| 06-2029 | 63 | 1% |
| 06-2030 | 65 | 1% |
| 06-2031 | 67 | 1% |
| 06-2032 | 69 | 1% |
| 06-2033 | 71 | 1% |
| 06-2034 | 72 | 1% |
with a 5-year average of $9 million. Projected CapEx is expected to maintain at approximately 0% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 06-2025 | 9 |
| 06-2026 | 10 |
| 06-2027 | 11 |
| 06-2028 | 12 |
| 06-2029 | 11 |
| 06-2030 | 12 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 44 |
| Days Inventory | 8 |
| Days Payables | 38 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 6M/2025 | 60 | 9 | 5 | 29 | 16 |
| 2026 | 126 | 18 | 11 | 2 | 94 |
| 2027 | 130 | 19 | 11 | (7) | 107 |
| 2028 | 133 | 19 | 12 | 15 | 88 |
| 2029 | 135 | 20 | 12 | 2 | 102 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 297.52 | 79.7% |
| 10-Year DCF (Growth) | 319.79 | 93.1% |
| 5-Year DCF (EBITDA) | 137.54 | -16.9% |
| 10-Year DCF (EBITDA) | 196.47 | 18.6% |
Is Kier Group PLC (KIE.L) a buy or a sell? Kier Group PLC is definitely a buy. Based on our DCF analysis, Kier Group PLC (KIE.L) appears to be significantly undervalued with upside potential of 93.1%. 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:
Investors should consider a strong buy at the current market price of $165.60.