As of May 27, 2025, Premier Foods PLC's estimated intrinsic value ranges from $181.18 to $333.86 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $333.86 | +57.1% |
| Discounted Cash Flow (5Y) | $276.48 | +30.1% |
| Dividend Discount Model (Multi-Stage) | $181.18 | -14.7% |
| Dividend Discount Model (Stable) | $235.51 | +10.8% |
| Earnings Power Value | $210.33 | -1.0% |
Is Premier Foods PLC (PFD.L) undervalued or overvalued?
With the current market price at $212.50, 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 Premier Foods 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 | 0.48 | 0.57 |
| Cost of equity | 6.9% | 9.0% |
| Cost of debt | 4.9% | 6.8% |
| Tax rate | 20.9% | 23.3% |
| Debt/Equity ratio | 0.18 | 0.18 |
| After-tax WACC | 6.4% | 8.4% |
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 | $276 | $2,549M | 70.4% |
| 10-Year Growth | $334 | $3,049M | 55.4% |
| 5-Year EBITDA | $194 | $1,835M | 58.9% |
| 10-Year EBITDA | $257 | $2,377M | 42.8% |
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 | $144M |
| Discount Rate (WACC) | 8.4% - 6.4% |
| Enterprise Value | $1,709M - $2,238M |
| Net Debt | $144M |
| Equity Value | $1,566M - $2,095M |
| Outstanding Shares | 9M |
| Fair Value | $180 - $241 |
| Selected Fair Value | $210.33 |
| Metric | Value |
|---|---|
| Market Capitalization | $1849M |
| Enterprise Value | $1993M |
| Trailing P/E | 11.25 |
| Forward P/E | 14.17 |
| Trailing EV/EBITDA | 6.05 |
| Current Dividend Yield | 80.58% |
| Dividend Growth Rate (5Y) | -45.68% |
| 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% | $100.16 |
| Discounted Cash Flow (5Y) | 25% | $69.12 |
| Dividend Discount Model (Multi-Stage) | 20% | $36.24 |
| Dividend Discount Model (Stable) | 15% | $35.33 |
| Earnings Power Value | 10% | $21.03 |
| Weighted Average | 100% | $261.87 |
Based on our comprehensive valuation analysis, Premier Foods PLC's weighted average intrinsic value is $261.87, which is approximately 23.2% above the current market price of $212.50.
Key investment considerations:
Given these factors, we believe Premier Foods PLC is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.