What is MCB.L's Intrinsic value?

McBride PLC (MCB.L) Intrinsic Value Analysis

Executive Summary

As of December 15, 2025, McBride PLC's estimated intrinsic value ranges from $143.34 to $1012.64 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Discounted Cash Flow (10Y) $143.34 +6.7%
Discounted Cash Flow (5Y) $154.77 +15.2%
Dividend Discount Model (Multi-Stage) $253.68 +88.7%
Dividend Discount Model (Stable) $1012.64 +653.5%
Earnings Power Value $864.47 +543.2%

Is McBride PLC (MCB.L) undervalued or overvalued?

With the current market price at $134.40, the stock appears to be significantly undervalued.

Understanding Intrinsic Value

Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate McBride PLC's intrinsic value, including:

  1. Discounted Cash Flow (DCF): Values the company based on projected future cash flows
  2. Dividend Discount Model (DDM): Values the company based on expected future dividend payments
  3. Earnings Power Value (EPV): Values the company based on its current earnings power, assuming no growth

Weighted Average Cost of Capital (WACC)

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 0.51 0.63
Cost of equity 7.0% 9.4%
Cost of debt 4.6% 81.5%
Tax rate 30.7% 47.6%
Debt/Equity ratio 0.65 0.65
After-tax WACC 5.5% 22.5%

Valuation Methods

1. Discounted Cash Flow (DCF) Valuation

Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:

  • Forecast Period: 5-year DCF and 10-year DCF
  • Terminal Growth Rate: 0.0% (range: 3.0% - 5.0%)
  • Discount Rate: 14.0% (range: 0.0% - 9.3%)

Key Projections:

  • Revenue growth from $926 (FY06-2025) to $1,187 (FY06-2035)
  • Net profit margin expansion from 4% to 4%
  • Capital expenditures maintained at approximately 2% of revenue
DCF Model Fair Value Enterprise Value % from Terminal Value
5-Year Growth $155 $352M 61.2%
10-Year Growth $143 $334M 32.8%
5-Year EBITDA $225 $465M 70.6%
10-Year EBITDA $192 $412M 45.4%

2. Dividend Discount Model (DDM)

The DDM values a company based on its expected future dividend payments. We used two approaches:

Multi-Stage DDM:

  • Current payout ratio: 0.0%
  • Stable payout ratio: 90.0%
  • Growth transition: 5 years
  • Cost of equity: 8.2%
  • Long-term growth rate: 2.0%
  • Fair value: $253.68 (88.7% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 9.4% (Low) to 7.0% (High)
  • Long-term growth rate: 1.0% (Low) to 3.0% (High)
  • Fair value range: $550 to $1,475
  • Selected fair value: $1012.64 (653.5% from current price)

3. Earnings Power Value (EPV)

EPV assesses a company's value based on its current normalized earnings power, assuming no growth.

EPV Component Value
Normalized Earnings $131M
Discount Rate (WACC) 22.5% - 5.5%
Enterprise Value $584M - $2,386M
Net Debt $105M
Equity Value $479M - $2,281M
Outstanding Shares 2M
Fair Value $300 - $1,429
Selected Fair Value $864.47

Key Financial Metrics

Metric Value
Market Capitalization $215M
Enterprise Value $320M
Trailing P/E 2.04
Forward P/E 6.25
Trailing EV/EBITDA 7.55
Current Dividend Yield 0.00%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 0.65

Investment Decision Framework

To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:

  1. Forecast Certainty: DCF methods rely on long-term projections, while earnings power value focuses on current normalized earnings
  2. Business Model Alignment: Dividend models are more appropriate for mature companies with established dividend policies
  3. Historical Accuracy: How well each method has predicted fair value historically

Valuation Weight Matrix

Valuation Method Weight Weighted Value
Discounted Cash Flow (10Y) 30% $43.00
Discounted Cash Flow (5Y) 25% $38.69
Dividend Discount Model (Multi-Stage) 20% $50.74
Dividend Discount Model (Stable) 15% $151.90
Earnings Power Value 10% $86.45
Weighted Average 100% $370.78

Investment Conclusion

Based on our comprehensive valuation analysis, McBride PLC's intrinsic value is $370.78, which is approximately 175.9% above the current market price of $134.40.

Key investment considerations:

  • Strong projected earnings growth (4% to 4% margin)
  • Consistent cash flow generation

Given these factors, we believe McBride PLC is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.