What is PMI.L's Intrinsic value?

Premier Miton Group PLC (PMI.L) Intrinsic Value Analysis

Executive Summary

As of May 22, 2025, Premier Miton Group PLC's estimated intrinsic value ranges from $33.56 to $110.36 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Dividend Discount Model (Multi-Stage) $50.75 -15.4%
Dividend Discount Model (Stable) $33.56 -44.1%
Earnings Power Value $110.36 +83.9%

Is Premier Miton Group PLC (PMI.L) undervalued or overvalued?

With the current market price at $60.00, the stock appears to be fairly valued.

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 Premier Miton Group PLC's intrinsic value, including:

  1. Dividend Discount Model (DDM): Values the company based on expected future dividend payments
  2. 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 0.49 0.58
Cost of equity 6.9% 9.0%
Cost of debt 5.0% 5.0%
Tax rate 36.7% 37.9%
Debt/Equity ratio 0.02 0.02
After-tax WACC 6.8% 8.9%

Valuation Methods

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: 480.5%
  • Stable payout ratio: 90.0%
  • Growth transition: 5 years
  • Cost of equity: 8.0%
  • Long-term growth rate: 4.0%
  • Fair value: $50.75 (-15.4% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 9.0% (Low) to 6.9% (High)
  • Long-term growth rate: 3.0% (Low) to 5.0% (High)
  • Fair value range: $13 to $54
  • Selected fair value: $33.56 (-44.1% 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 $11M
Discount Rate (WACC) 8.9% - 6.8%
Enterprise Value $128M - $166M
Net Debt $(34)M
Equity Value $162M - $200M
Outstanding Shares 2M
Fair Value $99 - $122
Selected Fair Value $110.36

Key Financial Metrics

Metric Value
Market Capitalization $98M
Enterprise Value $65M
Trailing P/E 52.18
Forward P/E 43.86
Trailing EV/EBITDA 5.60
Current Dividend Yield 924.04%
Dividend Growth Rate (5Y) -6.21%
Debt-to-Equity Ratio 0.02

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
Dividend Discount Model (Multi-Stage) 44% $10.15
Dividend Discount Model (Stable) 33% $5.03
Earnings Power Value 22% $11.04
Weighted Average 100% $58.27

Investment Conclusion

Based on our comprehensive valuation analysis, Premier Miton Group PLC's weighted average intrinsic value is $58.27, which is approximately 2.9% below the current market price of $60.00.

Key investment considerations:

  • Strong projected earnings growth (3% to 4% margin)
  • Conservative capital structure (Debt/Equity of 0.02)

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