As of June 18, 2025, Lookers PLC's estimated intrinsic value ranges from $110.46 to $1230.40 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $284.44 | +119.1% |
| Discounted Cash Flow (5Y) | $223.03 | +71.8% |
| Dividend Discount Model (Multi-Stage) | $117.53 | -9.5% |
| Dividend Discount Model (Stable) | $110.46 | -14.9% |
| Earnings Power Value | $1230.40 | +847.9% |
Is Lookers PLC (LOOK.L) undervalued or overvalued?
With the current market price at $129.80, 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 Lookers 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 | 1.21 | 1.46 |
| Cost of equity | 11.2% | 15.2% |
| Cost of debt | 4.0% | 5.7% |
| Tax rate | 18.3% | 26.1% |
| Debt/Equity ratio | 1.09 | 1.09 |
| After-tax WACC | 7.1% | 9.5% |
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 | $223 | $907M | 70.8% |
| 10-Year Growth | $284 | $1,145M | 53.7% |
| 5-Year EBITDA | $171 | $706M | 62.6% |
| 10-Year EBITDA | $220 | $896M | 40.9% |
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 | $390M |
| Discount Rate (WACC) | 9.5% - 7.1% |
| Enterprise Value | $4,115M - $5,510M |
| Net Debt | $42M |
| Equity Value | $4,073M - $5,468M |
| Outstanding Shares | 4M |
| Fair Value | $1,051 - $1,410 |
| Selected Fair Value | $1230.40 |
| Metric | Value |
|---|---|
| Market Capitalization | $503M |
| Enterprise Value | $545M |
| Trailing P/E | 7.88 |
| Forward P/E | 7.16 |
| Trailing EV/EBITDA | 3.60 |
| Current Dividend Yield | 230.51% |
| Dividend Growth Rate (5Y) | -3.19% |
| Debt-to-Equity Ratio | 1.09 |
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% | $85.33 |
| Discounted Cash Flow (5Y) | 25% | $55.76 |
| Dividend Discount Model (Multi-Stage) | 20% | $23.51 |
| Dividend Discount Model (Stable) | 15% | $16.57 |
| Earnings Power Value | 10% | $123.04 |
| Weighted Average | 100% | $304.21 |
Based on our comprehensive valuation analysis, Lookers PLC's weighted average intrinsic value is $304.21, which is approximately 134.4% above the current market price of $129.80.
Key investment considerations:
Given these factors, we believe Lookers PLC is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.