As of May 24, 2025, Royal Mail PLC has a Discounted Cash Flow (DCF) derived fair value of $0.00 per share. With the current market price at $214.00, this represents a potential upside of -269.4%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $0.00 |
| DCF Fair Value (10-year) | $0.00 |
| Potential Upside (5-year) | -324.1% |
| Potential Upside (10-year) | -269.4% |
| Discount Rate (WACC) | 6.8% - 10.7% |
Revenue is projected to grow from $12044 million in 03-2023 to $15992 million by 03-2033, representing a compound annual growth rate of approximately 2.9%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 03-2023 | 12044 | 5% |
| 03-2024 | 12455 | 3% |
| 03-2025 | 12858 | 3% |
| 03-2026 | 13606 | 6% |
| 03-2027 | 13900 | 2% |
| 03-2028 | 14332 | 3% |
| 03-2029 | 14618 | 2% |
| 03-2030 | 14911 | 2% |
| 03-2031 | 15371 | 3% |
| 03-2032 | 15678 | 2% |
| 03-2033 | 15992 | 2% |
Net profit margin is expected to improve from -7% in 03-2023 to 0% by 03-2033, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 03-2023 | (873) | -7% |
| 03-2024 | (483) | -4% |
| 03-2025 | (384) | -3% |
| 03-2026 | (287) | -2% |
| 03-2027 | (174) | -1% |
| 03-2028 | (58) | 0% |
| 03-2029 | (59) | 0% |
| 03-2030 | (61) | 0% |
| 03-2031 | (62) | 0% |
| 03-2032 | (64) | 0% |
| 03-2033 | (65) | 0% |
. Projected CapEx is expected to maintain at approximately 3% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 03-2024 | 338 |
| 03-2025 | 404 |
| 03-2026 | 405 |
| 03-2027 | 356 |
| 03-2028 | 346 |
| 03-2029 | 357 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 44 |
| Days Inventory | 2 |
| Days Payables | 35 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 2024 | (195) | (83) | 321 | (559) | 126 |
| 2025 | (11) | (66) | 331 | 466 | (742) |
| 2026 | 106 | (49) | 351 | 3 | (199) |
| 2027 | 190 | (30) | 358 | (58) | (81) |
| 2028 | 316 | (10) | 369 | 138 | (181) |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 0.00 | -324.1% |
| 10-Year DCF (Growth) | 0.00 | -269.4% |
| 5-Year DCF (EBITDA) | 0.00 | -100.0% |
| 10-Year DCF (EBITDA) | 0.00 | -100.0% |
Is Royal Mail PLC (RMG.L) a buy or a sell? Royal Mail PLC is definitely a sell. Based on our DCF analysis, Royal Mail PLC (RMG.L) appears to be overvalued with upside potential of -269.4%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider reducing exposure at the current market price of $214.00.