As of May 29, 2025, London Stock Exchange Group PLC's estimated intrinsic value ranges from $4123.96 to $9239.56 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $6248.03 | -45.2% |
| Discounted Cash Flow (5Y) | $5259.14 | -53.9% |
| Dividend Discount Model (Multi-Stage) | $4925.84 | -56.8% |
| Dividend Discount Model (Stable) | $4123.96 | -63.9% |
| Earnings Power Value | $9239.56 | -19.0% |
Is London Stock Exchange Group PLC (LSEG.L) undervalued or overvalued?
With the current market price at $11410.00, 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 | 0.46 | 0.57 |
| Cost of equity | 6.7% | 9.0% |
| Cost of debt | 4.0% | 5.2% |
| Tax rate | 24.5% | 27.3% |
| Debt/Equity ratio | 0.16 | 0.16 |
| After-tax WACC | 6.2% | 8.2% |
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 | $5,259 | $34,143M | 85.4% |
| 10-Year Growth | $6,248 | $39,342M | 74.4% |
| 5-Year EBITDA | $4,449 | $29,885M | 83.3% |
| 10-Year EBITDA | $5,294 | $34,326M | 70.7% |
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 | $3,904M |
| Discount Rate (WACC) | 8.2% - 6.2% |
| Enterprise Value | $47,358M - $62,786M |
| Net Debt | $6,490M |
| Equity Value | $40,868M - $56,296M |
| Outstanding Shares | 5M |
| Fair Value | $7,772 - $10,707 |
| Selected Fair Value | $9239.56 |
| Metric | Value |
|---|---|
| Market Capitalization | $59994M |
| Enterprise Value | $66484M |
| Trailing P/E | 87.58 |
| Forward P/E | 58.99 |
| Trailing EV/EBITDA | 11.40 |
| Current Dividend Yield | 105.90% |
| Dividend Growth Rate (5Y) | 25.72% |
| Debt-to-Equity Ratio | 0.16 |
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% | $1874.41 |
| Discounted Cash Flow (5Y) | 25% | $1314.78 |
| Dividend Discount Model (Multi-Stage) | 20% | $985.17 |
| Dividend Discount Model (Stable) | 15% | $618.59 |
| Earnings Power Value | 10% | $923.96 |
| Weighted Average | 100% | $5716.91 |
Based on our comprehensive valuation analysis, London Stock Exchange Group PLC's weighted average intrinsic value is $5716.91, which is approximately 49.9% below the current market price of $11410.00.
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.