As of May 27, 2025, Rathbone Brothers PLC's estimated intrinsic value ranges from $941.99 to $3521.95 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $1688.20 | +4.0% |
| Discounted Cash Flow (5Y) | $1096.52 | -32.5% |
| Dividend Discount Model (Multi-Stage) | $941.99 | -42.0% |
| Dividend Discount Model (Stable) | $965.92 | -40.5% |
| Earnings Power Value | $3521.95 | +116.9% |
Is Rathbone Brothers PLC (RAT.L) undervalued or overvalued?
With the current market price at $1624.00, the stock appears to be fairly valued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Rathbone Brothers 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 | 0.78 | 1.23 |
| Cost of equity | 8.6% | 13.6% |
| Cost of debt | 4.0% | 7.6% |
| Tax rate | 30.0% | 34.5% |
| Debt/Equity ratio | 1.43 | 1.43 |
| After-tax WACC | 5.2% | 8.5% |
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 | $1,097 | $2,429M | 91.2% |
| 10-Year Growth | $1,688 | $3,052M | 81.0% |
| 5-Year EBITDA | $(1,234) | $970M | 78.0% |
| 10-Year EBITDA | $160 | $1,443M | 59.8% |
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 | $322M |
| Discount Rate (WACC) | 8.5% - 5.2% |
| Enterprise Value | $3,778M - $6,186M |
| Net Debt | $1,275M |
| Equity Value | $2,504M - $4,911M |
| Outstanding Shares | 1M |
| Fair Value | $2,378 - $4,666 |
| Selected Fair Value | $3521.95 |
| Metric | Value |
|---|---|
| Market Capitalization | $1709M |
| Enterprise Value | $2984M |
| Trailing P/E | 26.10 |
| Forward P/E | 26.17 |
| Trailing EV/EBITDA | 5.85 |
| Current Dividend Yield | 332.85% |
| Dividend Growth Rate (5Y) | 10.74% |
| Debt-to-Equity Ratio | 1.43 |
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% | $506.46 |
| Discounted Cash Flow (5Y) | 25% | $274.13 |
| Dividend Discount Model (Multi-Stage) | 20% | $188.40 |
| Dividend Discount Model (Stable) | 15% | $144.89 |
| Earnings Power Value | 10% | $352.20 |
| Weighted Average | 100% | $1466.07 |
Based on our comprehensive valuation analysis, Rathbone Brothers PLC's weighted average intrinsic value is $1466.07, which is approximately 9.7% below the current market price of $1624.00.
Key investment considerations:
Given these factors, we believe Rathbone Brothers PLC is currently fairly valued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.