As of July 16, 2025, London Stock Exchange Group PLC's estimated intrinsic value ranges from $5535.82 to $9894.86 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $7331.23 | -32.6% |
| Discounted Cash Flow (5Y) | $6186.85 | -43.1% |
| Dividend Discount Model (Multi-Stage) | $5535.82 | -49.1% |
| Dividend Discount Model (Stable) | $5639.50 | -48.1% |
| Earnings Power Value | $9894.86 | -9.0% |
Is London Stock Exchange Group PLC (LSEG.L) undervalued or overvalued?
With the current market price at $10870.00, 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 London Stock Exchange 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 | 0.37 | 0.52 |
| Cost of equity | 6.2% | 8.6% |
| Cost of debt | 4.0% | 5.2% |
| Tax rate | 24.5% | 27.3% |
| Debt/Equity ratio | 0.18 | 0.18 |
| After-tax WACC | 5.7% | 7.9% |
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 | $6,187 | $39,191M | 87.1% |
| 10-Year Growth | $7,331 | $45,240M | 77.3% |
| 5-Year EBITDA | $4,423 | $29,869M | 83.1% |
| 10-Year EBITDA | $5,383 | $34,941M | 70.6% |
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 | $3,904M |
| Discount Rate (WACC) | 7.9% - 5.7% |
| Enterprise Value | $49,455M - $68,126M |
| Net Debt | $6,490M |
| Equity Value | $42,965M - $61,636M |
| Outstanding Shares | 5M |
| Fair Value | $8,129 - $11,661 |
| Selected Fair Value | $9894.86 |
| Metric | Value |
|---|---|
| Market Capitalization | $57455M |
| Enterprise Value | $63945M |
| Trailing P/E | 83.88 |
| Forward P/E | 56.50 |
| Trailing EV/EBITDA | 11.15 |
| Current Dividend Yield | 113.09% |
| Dividend Growth Rate (5Y) | 25.72% |
| Debt-to-Equity Ratio | 0.18 |
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% | $2199.37 |
| Discounted Cash Flow (5Y) | 25% | $1546.71 |
| Dividend Discount Model (Multi-Stage) | 20% | $1107.16 |
| Dividend Discount Model (Stable) | 15% | $845.93 |
| Earnings Power Value | 10% | $989.49 |
| Weighted Average | 100% | $6688.66 |
Based on our comprehensive valuation analysis, London Stock Exchange Group PLC's intrinsic value is $6688.66, which is approximately 38.5% below the current market price of $10870.00.
Key investment considerations:
Given these factors, we believe London Stock Exchange Group PLC is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.