What is MUL.L's Intrinsic value?

Mulberry Group PLC (MUL.L) Intrinsic Value Analysis

Executive Summary

As of May 23, 2025, Mulberry Group PLC's estimated intrinsic value ranges from $1704.18 to $1704.18 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Earnings Power Value $1704.18 +2030.2%

Is Mulberry Group PLC (MUL.L) undervalued or overvalued?

With the current market price at $80.00, 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 Mulberry Group PLC's intrinsic value, including:

  1. 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 0.41 0.47
Cost of equity 6.4% 8.3%
Cost of debt 5.0% 7.0%
Tax rate 2.3% 5.6%
Debt/Equity ratio 1.41 1.41
After-tax WACC 5.5% 7.3%

Valuation Methods

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 $80M
Discount Rate (WACC) 7.3% - 5.5%
Enterprise Value $1,090M - $1,437M
Net Debt $70M
Equity Value $1,020M - $1,367M
Outstanding Shares 1M
Fair Value $1,457 - $1,952
Selected Fair Value $1704.18

Key Financial Metrics

Metric Value
Market Capitalization $56M
Enterprise Value $126M
Trailing P/E 0.00
Forward P/E 0.00
Trailing EV/EBITDA 4.80
Current Dividend Yield 103.30%
Dividend Growth Rate (5Y) -33.04%
Debt-to-Equity Ratio 1.41

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
Earnings Power Value 100% $170.42
Weighted Average 100% $1704.18

Investment Conclusion

Based on our comprehensive valuation analysis, Mulberry Group PLC's weighted average intrinsic value is $1704.18, which is approximately 2030.2% above the current market price of $80.00.

Key investment considerations:

  • Strong projected earnings growth (-23% to -14% margin)
  • Consistent cash flow generation

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