As of May 24, 2025, Kier Group PLC's estimated intrinsic value ranges from $61.79 to $484.50 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $319.79 | +93.1% |
| Discounted Cash Flow (5Y) | $297.52 | +79.7% |
| Dividend Discount Model (Multi-Stage) | $78.52 | -52.6% |
| Dividend Discount Model (Stable) | $61.79 | -62.7% |
| Earnings Power Value | $484.50 | +192.6% |
Is Kier Group PLC (KIE.L) undervalued or overvalued?
With the current market price at $165.60, 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 Kier Group 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 | 1.32 | 2.01 |
| Cost of equity | 11.9% | 19.0% |
| Cost of debt | 4.7% | 6.2% |
| Tax rate | 22.6% | 24.1% |
| Debt/Equity ratio | 2.33 | 2.33 |
| After-tax WACC | 6.1% | 9.0% |
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 | $298 | $1,353M | 74.7% |
| 10-Year Growth | $320 | $1,447M | 54.2% |
| 5-Year EBITDA | $138 | $682M | 49.8% |
| 10-Year EBITDA | $196 | $929M | 28.7% |
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 | $156M |
| Discount Rate (WACC) | 9.0% - 6.1% |
| Enterprise Value | $1,731M - $2,546M |
| Net Debt | $104M |
| Equity Value | $1,627M - $2,441M |
| Outstanding Shares | 4M |
| Fair Value | $388 - $581 |
| Selected Fair Value | $484.50 |
| Metric | Value |
|---|---|
| Market Capitalization | $695M |
| Enterprise Value | $799M |
| Trailing P/E | 15.98 |
| Forward P/E | 12.29 |
| Trailing EV/EBITDA | 3.55 |
| Current Dividend Yield | 332.85% |
| Dividend Growth Rate (5Y) | -48.90% |
| Debt-to-Equity Ratio | 2.33 |
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% | $95.94 |
| Discounted Cash Flow (5Y) | 25% | $74.38 |
| Dividend Discount Model (Multi-Stage) | 20% | $15.70 |
| Dividend Discount Model (Stable) | 15% | $9.27 |
| Earnings Power Value | 10% | $48.45 |
| Weighted Average | 100% | $243.74 |
Based on our comprehensive valuation analysis, Kier Group PLC's weighted average intrinsic value is $243.74, which is approximately 47.2% above the current market price of $165.60.
Key investment considerations:
Given these factors, we believe Kier Group PLC is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.